Paraguay is preparing to take its nascent cryptocurrency industry mainstream.
Last week, the Latin American country’s anti-money-laundering (AML) chief, the Secretary for Preventing Money and Property Laundering (SEPRELAD), announced a nationwide crypto survey. Every one of Paraguay’s virtual asset service providers (VASPs) was directed to open their books to the government for the first time. The self-reported information was due Dec. 20.
Impelled by the Financial Action Task Force’s (FATF) June guidance on VASPs, the mass audit will help Paraguay’s government understand its domestic crypto industry, SEPRELAD officials told CoinDesk. And it will pave the way for the country’s first crypto-specific regulations, set to roll out in the first half of 2020.
“Data obtained will be used to measure the degree of adoption, complexity and size of the virtual asset market in Paraguay, with the purpose of drafting a regulation that adequately regulates them and mitigates the risk of misuse,” Secretary Minister Christian Villanueva said.
Never before has this landlocked nation of 6.8 million regulated cryptocurrencies, though its central bank warned the public last June that only the guaraní currency is legal tender.
Paraguay has instead largely avoided the issue. In a country dominated by off-the-books business dealings – the International Monetary Fund estimated that informal employment represents “more than half” of Paraguay’s total jobs – bitcoin regulation was a financial afterthought.
But FATF’s June 2019 regulatory guidelines increased pressure for Paraguay to develop crypto standards, according to Villanueva. Recommendation 15 of the FATF guideline expanded AML benchmarks to include technologies such as “virtual assets”
Now, with its new directive, SEPRELAD puts Paraguay on track for compliance with Recommendation 15 before 2020 is out. Crypto miners, over-the-counter (OTC) trading desks, exchanges and other VASPs will have to register…