Paraguay Audits Local Crypto Industry to Prepare for FATF-Style Regulations

Paraguay is preparing to take its nascent cryptocurrency industry mainstream.

Every one of Paraguay's virtual asset service providers 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 June guidance on VASPs, the mass audit will help Paraguay's government understand its domestic crypto industry, SEPRELAD officials told CoinDesk.

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.

FATF's June 2019 regulatory guidelines increased pressure for Paraguay to develop crypto standards, according to Villanueva.

Now, with its new directive, SEPRELAD puts Paraguay on track for compliance with Recommendation 15 before 2020 is out.

SEPRELAD's audit puts VASPs on track for eventual inclusion in Paraguay's formal financial landscape, according to business analyst and Paraguayan bitcoiner Stan Canova.

Before the government took a stand on crypto, Canova said, Paraguay's banking sector shut out the miners and traders that did.

Paraguay's AML enforcer recently brokered a regulatory détente with the country's crypto businesses.

In September, Congressman Sebastían Garciá, an active voice in Paraguay's crypto space, held a conference between SEPRELAD and the industry, seeking to find common ground.