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Paraguay

Retail_Trading_Status

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Analysis ID
#21
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Archived
Created
2025-04-12 06:37
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Live

Executive Summary

The regulatory status of retail cryptocurrency trading in Paraguay is Unclear, lacking comprehensive regulation. While not explicitly banned, the activity is subject to AML/CFT measures targeting Virtual Asset Service Providers (VASPs) overseen by SEPRELAD. The Central Bank of Paraguay (BCP) does not recognize cryptocurrencies as legal tender and has issued warnings about their risks. Recent legislative efforts include proposals for both temporary bans and comprehensive regulatory frameworks, highlighting ongoing uncertainty.

Key Pillars

  • Primary regulator: The Central Bank of Paraguay (BCP) and its Superintendencia de Valores issue warnings and clarifications but do not directly regulate crypto transactions.
  • Key compliance requirements: AML/CFT regulations are enforced by the Secretariat for the Prevention of Money or Asset Laundering (SEPRELAD) for Virtual Asset Service Providers (VASPs), including KYC/CDD and suspicious activity reporting.
  • Licensing/registration requirements: VASPs are considered "Obligated Subjects" and must comply with AML/CFT regulations, but there is no specific licensing or registration regime for crypto trading itself.

Landmark Laws

  • Law N° 1015/97: Paraguay's primary AML/CFT law, under which VASPs are designated as "Obligated Subjects" by SEPRELAD Resolution N° 8/2020.
  • SEPRELAD Resolution N° 8/2020: Designates individuals and legal entities involved in virtual asset activities as "Obligated Subjects" under Law N° 1015/97, Paraguay's primary AML/CFT law.
  • SEPRELAD Resolution N° 314/2021: Approved specific AML/CFT regulations for VASPs, requiring risk management systems, customer due diligence (KYC), and reporting suspicious activities.
  • Decree N° 7.692/22 (December 2022): Presidential veto of a bill regulating crypto mining, commercialization, intermediation, exchange, transfer, custody, and administration. The veto was upheld by the Chamber of Deputies.

Considerations

  • Cryptocurrencies are not legal tender in Paraguay.
  • Cryptocurrencies lack state guarantee or backing.
  • Value relies solely on user trust.
  • High-risk investments due to volatility, fraud, and operational risks.
  • Potential for total loss of invested capital.
  • Concerns over illegal electricity consumption by crypto mining operations.
  • Recognition of Bitcoin as experimental legal tender is under consideration.
  • AML/CFT compliance is required for VASPs.

Notes

  • In mid-2022, Congress passed a bill aimed at regulating crypto activities, but it was vetoed by the President in December 2022 (Decree N° 7.692/22) and subsequently archived.
  • In April 2024, a bill proposing a temporary ban on virtual assets and crypto mining was introduced.
  • In April 2024, another bill aimed for comprehensive regulation, including recognizing Bitcoin as experimental legal tender.
  • In May 2024, yet another bill specifically targeting the regulation of crypto mining was presented.
  • In March 2025, SEPRELAD signed a Memorandum of Understanding (MOU) with El Salvador's National Digital Assets Commission (CNAD) to enhance cooperation and information exchange.
  • The BCP has repeatedly stated that cryptocurrencies are not legal tender and do not have state backing.
  • The regulatory landscape is described as fluid, with conflicting legislative efforts indicating ongoing debate and uncertainty.

Detailed Explanation

The regulatory landscape for retail cryptocurrency trading in Paraguay is currently Unclear. There is no specific legal framework governing the issuance, trading, or holding of cryptocurrencies by individuals. The Central Bank of Paraguay (BCP) does not control, supervise, or regulate cryptocurrency transactions. The BCP and its Superintendencia de Valores have issued warnings that cryptocurrencies are not legal tender, lack state backing, and are high-risk investments with potential for total loss. Despite the lack of specific regulation, Paraguay's Secretariat for the Prevention of Money or Asset Laundering (SEPRELAD) has implemented AML/CFT measures targeting Virtual Asset Service Providers (VASPs), following Financial Action Task Force (FATF) recommendations. SEPRELAD Resolution N° 8/2020 designated entities involved in virtual asset activities as "Obligated Subjects" under Law N° 1015/97, the primary AML/CFT law. SEPRELAD Resolution N° 314/2021 approved AML/CFT regulations for VASPs, requiring risk management systems, customer due diligence (KYC), and suspicious activity reporting. In mid-2022, a bill aimed at regulating crypto mining, commercialization, intermediation, exchange, transfer, custody, and administration was passed by Congress but was vetoed by the President in December 2022 (Decree N° 7.692/22) due to concerns from the National Electricity Administration (ANDE) regarding electricity tariffs for miners. The veto was upheld by the Chamber of Deputies, archiving the bill. In April 2024, a bill was introduced proposing a temporary 180-day ban on virtual assets and crypto mining, driven by concerns over illegal electricity consumption. Simultaneously, another bill proposed a comprehensive regulatory regime, recognizing Bitcoin as experimental legal tender until a national digital currency is developed. In May 2024, a separate bill specifically targeting crypto mining regulation was also presented. In March 2025, SEPRELAD signed a Memorandum of Understanding (MOU) with El Salvador's National Digital Assets Commission (CNAD) to enhance cooperation and information exchange on digital asset service providers, focusing on combating unlicensed operations and money laundering. Altra Legal stated in February 2025 that Paraguay still lacks specific regulation for cryptocurrencies, their issuers, or intermediaries, despite several years of analysis and study. Livieres Guggiari noted in April 2024 that AML/CFT regulation implies the validity and legality of cryptocurrency activities within the scope of AML compliance. The CONACOM issued an opinion in June 2024 on the bill to ban crypto mining, stating that the bill is under study in the Chamber of Senators.

Summary Points

Retail Cryptocurrency Trading in Paraguay: Regulatory Analysis (April 12, 2025)

Overall Regulatory Status: Unclear

  • Exists in a legal grey area: Not explicitly prohibited, but lacks specific, comprehensive regulation.
  • Characterized by:
    • Absence of dedicated legal framework for retail crypto trading.
    • Targeted AML measures for service providers.
    • Official warnings about risks from regulatory bodies.

1. Key Regulatory Bodies and Their Roles

  • Central Bank of Paraguay (BCP):
    • Does not control, supervise, or regulate cryptocurrency transactions.
    • Has repeatedly stated that cryptocurrencies are not legal tender.
    • Emphasizes that cryptocurrencies lack state guarantee or backing.
    • Superintendencia de Valores (under BCP) issues warnings about risks.
  • Secretariat for the Prevention of Money or Asset Laundering (SEPRELAD):
    • Implements AML/CFT regulations for Virtual Asset Service Providers (VASPs).
    • Designates VASPs as "Obligated Subjects" under AML/CFT law (Law N° 1015/97).
    • Requires VASPs to implement risk management systems, KYC, and report suspicious activities (Resolution N° 314/2021).
  • National Electricity Administration (ANDE):
    • Raises concerns about preferential electricity tariffs for crypto miners.
    • Concerns contributed to the presidential veto of the 2022 crypto bill.
  • National Digital Assets Commission (CNAD) of El Salvador:
    • Signed MOU with SEPRELAD to enhance cooperation and information exchange.

2. Important Legislation and Regulations

  • Law N° 1015/97: Paraguay's primary AML/CFT law, under which VASPs are designated as "Obligated Subjects".
  • SEPRELAD Resolution N° 8/2020: Designates individuals and legal entities involved in virtual asset activities as "Obligated Subjects" under Law N° 1015/97.
  • SEPRELAD Resolution N° 314/2021: Approves specific AML/CFT regulations for VASPs, including KYC and reporting requirements.
  • Failed Legislation (2022):
    • Comprehensive bill aimed at regulating crypto mining, commercialization, intermediation, exchange, transfer, custody, and administration.
    • Passed by Congress but vetoed by the President (Decree N° 7.692/22) due to concerns about electricity tariffs.
    • Veto was upheld by the Chamber of Deputies, leading to the bill being archived.
  • Proposed Legislation (2024):
    • Bill proposing a temporary ban on the creation, conservation, storage, and commercialization of virtual assets and cryptocurrencies, as well as the installation of crypto mining farms.
    • Bill aiming for a comprehensive regulatory regime, including recognizing Bitcoin as an experimental legal tender.
    • Bill specifically targeting the regulation of crypto mining.

3. Requirements for Compliance

  • For Virtual Asset Service Providers (VASPs):
    • Compliance with AML/CFT regulations established by SEPRELAD.
    • Implementation of risk management systems.
    • Customer Due Diligence (KYC) procedures.
    • Reporting of suspicious activities.

4. Notable Restrictions or Limitations

  • Lack of Legal Tender Status: Cryptocurrencies are not legal tender in Paraguay.
  • Official Warnings: BCP and Superintendencia de Valores warn about the high risks associated with cryptocurrencies, including volatility, potential for fraud, and total loss of invested capital.
  • Potential Ban: Proposed legislation could temporarily ban crypto activities.

5. Recent Developments or Changes

  • April 2024: Introduction of conflicting legislative proposals: one for a temporary ban, another for comprehensive regulation.
  • March 2025: SEPRELAD signed a Memorandum of Understanding (MOU) with El Salvador's CNAD to enhance cooperation and supervision related to digital asset service providers.

Full Analysis Report

Report on the Current Status of Retail Cryptocurrency Trading in Paraguay

Date: April 12, 2025

Prepared by: Financial Regulatory Analyst

Topic: Retail_Trading_Status (Paraguay)

1. Current Status: Unclear

2. Detailed Narrative Explanation:

The regulatory status of retail cryptocurrency trading (buying, selling, holding by individuals) in Paraguay is best described as Unclear. While not explicitly prohibited, the activity exists in a complex and evolving legal grey area characterized by a lack of specific, comprehensive regulation, coupled with targeted anti-money laundering (AML) measures and official warnings about risks.

  • Absence of Specific Regulatory Framework: Paraguay currently lacks a dedicated legal framework that specifically governs the issuance, trading, and holding of cryptocurrencies by retail users [2, 3, 5]. Transactions involving cryptocurrencies are not directly controlled, supervised, or regulated by the Central Bank of Paraguay (BCP) [2]. Attempts to establish such a framework have faced challenges. A comprehensive bill aimed at regulating crypto mining, commercialization, intermediation, exchange, transfer, custody, and administration was passed by Congress in mid-2022 [4, 18] but was subsequently vetoed by the President in December 2022 (Decree N° 7.692/22), primarily due to concerns raised by the National Electricity Administration (ANDE) regarding preferential electricity tariffs for miners [3, 20]. The veto was ultimately upheld by the Chamber of Deputies, leading to the bill being archived [3, 20].
  • Official Stance and Warnings: The BCP and its Superintendencia de Valores have repeatedly issued public statements clarifying that cryptocurrencies are not legal tender in Paraguay, are not issued or authorized by the BCP, and do not possess any state guarantee or backing [3, 6, 9, 10, 12]. They emphasize that the value of cryptocurrencies relies solely on user trust and that they constitute high-risk investments due to volatility, potential for fraud, and operational risks, potentially leading to total loss of invested capital [3, 6, 10, 12]. The authorities urge caution and advise against dealing with unauthorized entities [6, 10, 12].
  • AML/CFT Regulation for Service Providers: While retail trading itself isn't specifically regulated, Paraguay's Secretariat for the Prevention of Money or Asset Laundering (SEPRELAD) has implemented measures targeting Virtual Asset Service Providers (VASPs) based on Financial Action Task Force (FATF) recommendations [3, 5].
    • SEPRELAD Resolution N° 8/2020 designated individuals and legal entities involved in virtual asset activities (mining, exchange, transfer, storage, administration, or related financial services) as "Obligated Subjects" under Paraguay's primary AML/CFT law (Law N° 1015/97) [3, 21].
    • SEPRELAD Resolution N° 314/2021 approved specific AML/CFT regulations for these VASPs, requiring them to implement risk management systems, conduct customer due diligence (KYC), and report suspicious activities [3, 21].
      This means that exchanges or platforms operating within Paraguay are subject to AML/CFT oversight, indirectly impacting retail users through KYC requirements imposed by these platforms. However, this does not constitute a comprehensive regulation of the trading activity itself or provide investor protection beyond AML concerns.
  • Ongoing Legislative Developments: The regulatory landscape remains fluid. In April 2024, a group of senators introduced a controversial bill proposing a temporary ban (180 days or until specific regulation is enacted) on the creation, conservation, storage, and commercialization of virtual assets and cryptocurrencies, as well as the installation of crypto mining farms [7, 11, 15, 16]. This proposal was primarily motivated by concerns over illegal electricity consumption by clandestine mining operations [11, 16]. Concurrently, another legislative proposal was introduced aiming for a comprehensive regulatory regime, including recognizing Bitcoin as an experimental legal tender until a national digital currency is developed [23]. In May 2024, yet another bill specifically targeting the regulation of crypto mining was presented [2]. These conflicting legislative efforts highlight the ongoing debate and uncertainty surrounding the future regulation of crypto activities in the country.
  • International Cooperation: In March 2025, SEPRELAD signed a Memorandum of Understanding (MOU) with El Salvador's National Digital Assets Commission (CNAD) to enhance cooperation, information exchange, and supervision related to digital asset service providers, particularly focusing on combating unlicensed operations and money laundering [5, 8, 24, 26]. This indicates an effort to strengthen oversight capabilities, potentially by learning from jurisdictions with more established crypto regulations.

Conclusion: Individuals in Paraguay appear to be able to engage in cryptocurrency trading at their own risk, as it is not explicitly banned. However, the lack of a clear legal framework specifically governing this activity, the BCP's explicit non-endorsement and warnings, the failure of past comprehensive regulatory attempts, and the current conflicting legislative proposals (including a potential ban) create significant uncertainty. The only concrete regulation applies AML/CFT rules to service providers. Therefore, the status is best categorized as Unclear due to the ambiguity, lack of comprehensive rules, and the active, unresolved legislative and regulatory discussions.

3. Relevant Excerpts from Sources:

  • On Lack of Specific Regulation: "Considering the global relevance and impact generated by cryptocurrencies and the general use of cryptoassets... countries found themselves needing to address their regulatory challenges, as in Paraguay, where there is still no specific regulation or normative for cryptocurrencies, nor for their issuers or intermediaries, although it has been analyzed and studied for several years with different sectors. In Paraguay, transactions carried out with cryptocurrencies are not controlled, supervised, or regulated by the Central Bank of Paraguay (BCP)." [2] - Altra Legal (Feb 2025)
  • On BCP's Stance: "The Superintendencia de Valores informs that cryptocurrencies are not registered or authorized by the Banco Central del Paraguay (BCP). They do not have legal tender status in the country nor do they have State backing... Given that their value depends exclusively on the trust users place in them, cryptocurrencies constitute high-risk investments, with the possibility of losing the entire invested capital." [12] - BCP Circular via MarketData (Mar 2025) (Similar statements in [6, 9, 10])
  • On AML/CFT Regulation for VASPs: "Following the recommendations issued by GAFI on 'new technologies', SEPRELAD issued Resolution No. 8/20. This resolution designated as Obligated Subjects those individuals or legal entities that carry out activities of mining or its equivalent, exchange, transfer, storage or administration of virtual assets, or participate in and provide financial services related to these... Subsequently, SEPRELAD issued Resolution No. 314/21, which provides the Regulation for the Prevention of Money Laundering and Terrorist Financing for those individuals or legal entities established or domiciled in the country that carry out activities associated with virtual assets." [3] - Vouga Abogados (Nov 2023) (Details also in [21])
  • On Failed 2022 Legislation: "However, through Decree No. 7.692/22 of December 2022, the Executive Power totally vetoed the bill. This veto was rejected by the Chamber of Senators, but in the Chamber of Deputies, the required number of votes to support the rejection did not exist, so the bill was finally archived." [3] - Vouga Abogados (Nov 2023) (Archiving confirmed by [20])
  • On 2024 Proposed Ban: "The Board of Directors of CONACOM issued an opinion on the bill that 'temporarily prohibits the creation, conservation, storage, and commercialization of virtual assets or cryptoassets, cryptocurrencies, and the installation of crypto mining farms in Paraguayan territory.' The project is currently under study in the Honorable Chamber of Senators." [7] - CONACOM (Jun 2024) (Bill details also in [11, 15, 16])
  • On Legality via AML Regulation: "This implies that, as there is now a regulation that covers and includes activities involving cryptocurrencies and virtual assets, these activities will be considered valid and legal in the Republic of Paraguay, as long as compliance with the legislation in question is met." [21] - Livieres Guggiari (Apr 2024) (Referring specifically to legality within the scope of AML compliance for VASPs, not general legal status or endorsement).

4. Source Links:

  1. (General Time Info) - https://www.google.com/search?q=time+in+America/Asuncion
  2. Altra Legal (Analysis of Crypto Regulation) - https://www.altralegal.com/criptomonedas-y-criptomineria-un-analisis-de-la-regulacion-en-paraguay/ (Link derived from Grounding API Redirect)
  3. Vouga Abogados (Fintech Regulation Overview) - https://vouga.com.py/avances-en-la-regulacion-fintech-en-el-paraguay-criptomonedas-y-cripto-activos/ (Link derived from Grounding API Redirect)
  4. Paraguayan Senate (Report on 2022 Bill Sanction) - https://www.senado.gov.py/index.php/noticias/noticias-presidencia/9949-sancionan-normativa-que-regula-la-comercializacion-de-criptoactivos-2022-07-14-17-00-18 (Link derived from Grounding API Redirect)
  5. CriptoNoticias (Report on Paraguay-El Salvador MOU) - https://www.criptonoticias.com/regulacion/el-salvador-paraguay-firman-acuerdo-regulatorio-criptomonedas/ (Link derived from Grounding API Redirect)
  6. Cointelegraph (Report on BCP Stance) - https://es.cointelegraph.com/news/paraguay-informed-that-cryptocurrencies-are-not-authorized-by-the-bcp (Link derived from Grounding API Redirect)
  7. CONACOM (Opinion on Proposed Ban Bill) - https://www.conacom.gov.py/la-conacom-emitio-una-opinion-sobre-el-proyecto-de-ley-del-sector-de-criptomineria/ (Link derived from Grounding API Redirect)
  8. Binance News (Report on Paraguay-El Salvador MOU) - https://www.binance.com/es-LA/square/post/5317603788675 (Link derived from Grounding API Redirect)
  9. Hoy (Report on BCP Warning) - https://www.hoy.com.py/nacionales/criptomonedas-no-tienen-curso-legal-en-paraguay-y-son-riesgosas-advierte-el-bpc (Link derived from Grounding API Redirect)
  10. La Nación (Report on BCP Warning) - https://www.lanacion.com.py/negocios/2025/03/06/bcp-advierte-que-criptomonedas-no-tienen-registro-ni-autorizacion-en-paraguay/ (Link derived from Grounding API Redirect)
  11. ABC Color (Report on Proposed Ban Bill) - https://www.abc.com.py/economia/2024/04/06/con-una-ley-buscan-prohibir-la-instalacion-de-granjas-de-criptomineria/ (Link derived from Grounding API Redirect)
  12. MarketData (Report on BCP Circular) - https://www.marketdata.com.py/finanzas/las-criptomonedas-no-son-registradas-ni-autorizadas-por-el-banco-central-del-paraguay-2025-03-06/ (Link derived from Grounding API Redirect)
  13. Revista FOCO (General Overview) - https://www.revistafoco.com.py/2023/07/05/criptomonedas-en-paraguay-como-funcionan/ (Link derived from Grounding API Redirect)
  14. Contabilidad.com.py (Discussion on Regulation vs Freedom) - https://contabilidad.com.py/paraguay-y-el-futuro-de-los-criptoactivos-regulacion-o-libertad-financiera/ (Link derived from Grounding API Redirect)
  15. CriptoNoticias (Report on Proposed Ban Bill) - https://www.criptonoticias.com/regulacion/paraguay-presentan-proyecto-ley-prohibir-toda-actividad-bitcoin/ (Link derived from Grounding API Redirect)
  16. Paraguayan Senate (Senator discussing Proposed Ban Bill) - https://www.senado.gov.py/index.php/noticias/noticias-comisiones/11859-senadora-lilian-samaniego-se-refirio-al-proyecto-de-ley-de-los-activos-virtuales-o-criptomonedas-2024-04-15-14-44-47 (Link derived from Grounding API Redirect)
  17. DailyForex (Discussion on Mining Legality) - https://www.dailyforex.com/es/criptomonedas/2024/11/criptomineria-en-paraguay-es-legal/223298 (Link derived from Grounding API Redirect)
  18. Cripto247 (Report on 2022 Bill Approval by Congress) - https://cripto247.com/comunidad-cripto/regulacion/paraguay-aprueba-una-ley-para-regular-el-minado-y-comercializacion-de-criptomonedas-188611 (Link derived from Grounding API Redirect)
  19. Vouga Abogados (Analysis of EU Rules and Paraguay AML) - https://vouga.com.py/criptoactivos-y-cumplimiento-oportunidades-para-empresas-europeas-en-paraguay/ (Link derived from Grounding API Redirect)
  20. Paraguayan Chamber of Deputies (Report on Archiving 2022 Bill) - https://www.diputados.gov.py/ww5/index.php/noticias/archivan-proyecto-de-ley-que-regula-comercializacion-y-administracion-de-criptomonedas (Link derived from Grounding API Redirect)
  21. Livieres Guggiari (Analysis of SEPRELAD Res. 314/2021) - https://livieresg.com.py/resolucion-no-314-2021-dictada-por-la-seprelad-un-avance-normativo-sobre-los-activos-virtuales/ (Link derived from Grounding API Redirect)
  22. Última Hora (Early SEPRELAD Stance 2018) - https://www.ultimahora.com/seprelad-acompana-uso-criptomonedas-pero-alerta-riesgos (Link derived from Grounding API Redirect)
  23. ABC Color (Report on 2024 Comprehensive Regulation Bill) - https://www.abc.com.py/economia/2024/04/11/presentan-otro-proyecto-de-ley-para-regular-las-criptomonedas/ (Link derived from Grounding API Redirect)
  24. BeInCrypto (Report on Paraguay-El Salvador MOU) - https://es.beincrypto.com/autoridades-paraguay-el-salvador-disenaran-marcos-regulatorios-criptomonedas/ (Link derived from Grounding API Redirect)
  25. UPAP (Research on Need for Legislation) - https://www.upap.edu.py/investigacion-sobre-la-necesidad-de-legislar-criptomonedas-en-paraguay/ (Link derived from Grounding API Redirect)
  26. TradingView News (Report on Paraguay-El Salvador MOU) - https://es.tradingview.com/news/cryptodaily:d6126729e094b:0/ (Link derived from Grounding API Redirect)
  27. BCP Superintendencia de Valores (List of Circulars, including 006/2025 on Crypto) - https://www.bcp.gov.py/superintendencia-de-valores-i1053 (Link derived from Grounding API Redirect)
  28. Cointelegraph (Report on 2022 Bill Approval by Senate) - https://es.cointelegraph.com/news/paraguay-s-crypto-regulatory-framework-is-one-step-away-from-being-law (Link derived from Grounding API Redirect)
  29. DailyForex (General Discussion on Bitcoin and Banks) - https://www.dailyforex.com/es/criptomonedas/2024/12/que-bancos-trabajan-con-bitcoin-en-paraguay/224238 (Link derived from Grounding API Redirect)

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