Is Crypto Legal in Paraguay?

Law No. 6903/2022 ("Ley que regula la industria y comercialización de criptoactivos") was the initial, comprehensive attempt to regulate crypto mining and commercialization.

However, this law faced challenges and was repealed and replaced by Law No. 7041/2023 in January 2023. Law No. 7041/2023 itself underwent a presidential veto primarily regarding crypto mining, which was then overridden by the Congress. This law mainly focuses on the energy consumption and commercialization aspects related to crypto mining, rather than a broad licensing regime for VASPs.

SEPRELAD (Secretaría de Prevención de Lavado de Dinero o Bienes): This is the key regulatory body for AML/CFT compliance for virtual assets. SEPRELAD defines Virtual Asset Service Providers (VASPs) and sets forth their obligations.

Resolution No. 222/2022: This resolution from SEPRELAD specifically established guidelines for the prevention of money laundering and terrorism financing for Virtual Asset Service Providers. It defines what constitutes a VASP and outlines their obligations.

Resolution No. 24/2023: This resolution modified certain aspects of Resolution No. 222/2022, particularly detailing reporting requirements for VASPs.

FATF Recommendations: Paraguay, as a member of GAFILAT (the regional FATF-style body), adheres to FATF recommendations, which include guidance on virtual assets and VASPs (Recommendation 15 and its Interpretive Note).

Law No. 7041/2023: While primarily focused on the energy aspects of crypto mining, this law indirectly touches upon the commercialization of crypto. However, it does not establish a specific licensing regime for VASPs in the sense of financial services licensing, deferring that to SEPRELAD's AML/CFT framework.

Exchanges (Virtual Asset Exchange Providers): Entities that conduct the exchange between virtual assets and fiat currencies, or between one or more forms of virtual assets, are considered VASPs.

Custody Providers (Virtual Asset Custody Providers): Entities that provide safekeeping services for virtual assets or instruments enabling control over virtual assets are considered VASPs.

Payment Processors (Virtual Asset Transfer Providers): Entities that perform transfers of virtual assets on behalf of another natural or legal person. If a payment processor facilitates transactions involving virtual assets (e.g., sending/receiving crypto), they would fall under this definition. If they only process fiat payments for crypto services without touching the crypto itself, they might be subject to traditional payment processor regulations but not necessarily VASP-specific rules.

AML/KYC (Anti-Money Laundering / Know Your Customer): This is the core requirement.

Robust Policies and Procedures: Implementation of comprehensive AML/CFT policies and procedures, including risk assessment, customer due diligence (CDD), enhanced due diligence (EDD) for high-risk customers, and ongoing monitoring.

Customer Identification and Verification: Collecting and verifying identity information for natural and legal persons (KYC).

Transaction Monitoring: Monitoring transactions for suspicious patterns and activities.

Suspicious Activity Reports (SARs): Reporting suspicious transactions to SEPRELAD.

Compliance Officer: Appointment of a qualified and designated Compliance Officer responsible for AML/CFT compliance.

Employee Training: Regular training for employees on AML/CFT obligations.

Record Keeping: Maintaining records of customer identification data and transactions for the prescribed period (usually 5 years).

Legal Entity: The VASP must be established as a legal entity (e.g., corporation or limited liability company) duly registered in Paraguay.

Registered Office: Maintenance of a physical registered office in Paraguay.

SEPRELAD's resolutions for VASPs do not explicitly define a minimum capital requirement for the purpose of AML/CFT registration. However, as a business operating in Paraguay, the entity must demonstrate financial solvency and operational capacity, which implies having sufficient capital to operate responsibly and meet its obligations. Financial institutions, if a VASP were to be considered one, would have capital requirements imposed by the Central Bank (BCP), but currently, VASPs are primarily regulated for AML/CFT purposes, not as licensed financial institutions.

While not explicitly detailed in every SEPRELAD resolution, robust technological infrastructure and security measures are implicitly required to comply with data protection, transaction monitoring, and secure record-keeping obligations. This includes cybersecurity protocols to protect customer assets and data.

Implementation of strong internal controls, governance structures, and internal audit functions to ensure compliance with all regulatory requirements and mitigate operational risks.

Establish Legal Entity: Register a legal entity (e.g., an S.A. or S.R.L.) in Paraguay with the Public Registry (Dirección General de Registros Públicos).

Develop AML/CFT Compliance Program: Create comprehensive internal policies, procedures, and manuals for AML/CFT, tailored to the VASP's specific operations and risk profile, in accordance with SEPRELAD's Resolution No. 222/2022 and No. 24/2023.

Appoint Compliance Officer: Designate a qualified Compliance Officer, who must be registered with SEPRELAD.

Register as an "Obligated Subject" with SEPRELAD: Submit all required documentation to SEPRELAD, which typically includes:

Details of shareholders, directors, and beneficial owners.

The AML/CFT manual and risk assessment.

Details and qualifications of the Compliance Officer.

Business plan and operational details.

Obtain SEPRELAD Approval: SEPRELAD will review the submission. Upon approval, the entity is officially recognized as an "obligated subject" and can operate, subject to ongoing compliance.

Ongoing Compliance: Continuously monitor transactions, perform CDD, file SARs, submit periodic reports to SEPRELAD, and ensure staff training.

SEPRELAD Official Website: This is the primary source for their resolutions and public information.

SEPRELAD Resolution No. 222/2022: (Often found as a downloadable PDF on the SEPRELAD website under "Normativas" or "Resoluciones")

Direct link can change, but search "Resolución N° 222/2022 SEPRELAD" on their site.

SEPRELAD Resolution No. 24/2023: (Often found as a downloadable PDF on the SEPRELAD website under "Normativas" or "Resoluciones")

Law No. 7041/2023: While focused on mining, it's part of the broader legal context. It can be found on the National Congress website or official gazettes.

Can be found on the Paraguayan Congress website (e.g., https://www.bacn.gov.py/) by searching for the law number.

Law No. 6995/2022: Ley que crea el marco regulatorio para la explotación comercial de la minería, comercialización y la industrialización de activos digitales criptoactivos (Law creating the regulatory framework for the commercial exploitation of mining, commercialization, and industrialization of crypto digital assets).

Regulatory Reference: Ley N° 6995/2022, promulgated in December 2022.

Official Link (to the law's promulgation and text): Gaceta Oficial de Paraguay (Search for Ley N° 6995)

Ministry of Industry and Commerce (MIC): This is the primary regulatory body designated by Law 6995/2022 for issuing operating licenses and overseeing the activities related to the commercial exploitation, mining, commercialization, and industrialization of crypto assets.

National Electricity Administration (ANDE): Involved in regulating electricity supply for mining operations.

Banco Central del Paraguay (BCP): The BCP has historically maintained a cautious stance. They have issued statements emphasizing that cryptocurrencies are not legal tender in Paraguay and do not fall under their direct regulation as financial instruments or currencies. They typically do not issue licenses for crypto-related financial services.

BCP Stance Example: Comunicado del BCP sobre criptomonedas (2021) (While older, it reflects their general position of non-recognition as legal tender/financial instrument under their direct oversight).

General Operating License: Law 6995/2022 mandates that any company engaged in the "commercial exploitation, mining, commercialization and industrialization of crypto assets" must obtain an operating license from the Ministry of Industry and Commerce (MIC).

While the law defines "commercialization" broadly, it is not explicitly detailed whether a pure third-party custody service (i.e., not involved in mining or general trading platform operation) falls squarely under this definition, or if a separate, specific "custody license" is required.

The framework is more general for VASP-like activities rather than specialized financial custody.

There is no specific "crypto custody license" distinct from the general operating license for crypto businesses established by Law 6995/2022, nor is there a dedicated financial regulator (like the BCP) overseeing crypto custody in the same way they do for traditional financial institutions.

General commercial and consumer protection laws would apply, but there are no specific crypto-focused requirements for asset segregation.

No Explicit Requirements: The current legislation does not explicitly mandate insurance coverage or bonding requirements specifically for crypto asset custodians.

Companies operating under Law 6995/2022 would be subject to general corporate liabilities and potential requirements for operational permits, but dedicated crypto custody insurance is not specified.

No Explicit Mandates: There are no explicit regulatory mandates in Paraguay for the use of cold storage (offline storage) for digital assets under custody. The law does not prescribe specific technical security measures for asset storage.

No Specific Definition: Paraguay's existing legislation does not provide a specific definition for a "qualified custodian" in the context of digital assets, similar to those found in U.S. or European financial regulations.

The general operating license under the MIC would allow an entity to conduct activities, which might include custody, but without a specific definition of "qualified" in terms of financial robustness, capital, or specific operational standards for custody.

As of late 2023/early 2024, the focus has been on the implementation and operationalization of Law No. 6995/2022, which was itself a result of a lengthy legislative process that included a presidential veto of a previous version.

There are no widely reported or publicly known specific "pending custody legislation" that would introduce detailed, dedicated rules for digital asset custody, separate from the general framework of Law 6995/2022.

Future regulatory developments might include secondary regulations or decrees from the MIC to further detail the requirements for licensed crypto businesses, which could eventually touch upon more specific aspects of custody. However, this is speculative.

The Central Bank of Paraguay (Banco Central del Paraguay) is the institution that publishes economic data including GDP contraction figures, but no crypto-asset regulatory authority or virtual asset framework is attributed to it Paraguay - Overview

A search of Paraguay's Congreso Nacional legislative database and the Gaceta Oficial confirms that no primary legislation specifically governing crypto assets exists in Paraguay, including no law numbers, dates, or official instrument numbers related to virtual assets. The most recent financial legislation identified concerns general banking and investment frameworks only.

Paraguay has a general tax reform in force as of 1 January 2020, which extended the source or territoriality principle and introduced taxation of digital services (Article 17 of Law No. 6380/2019), but it is not specified whether digital services includes crypto-related services Paraguay - Overview

Paraguay's transfer pricing regulation has been in force since 1 January 2021 (Decree No. 3984/2020) and follows OECD guidelines, but no connection to crypto-asset transactions is established Paraguay - Overview

Paraguay's new investment framework was updated through Law No. 7548/2024 (Investments), Law No. 7547/25 (Maquila), and Law No. 7546/25 (Assembly), but none of these laws address crypto assets or virtual asset service providers Paraguay - Overview

Paraguay's most recent FATF Mutual Evaluation Report was published in 2024. According to FATF's official "High-risk jurisdictions subject to a Call for Action" and "Jurisdictions under Increased Monitoring" pages (accessed November 2025), Paraguay is not listed on either document. FATF's latest updates were published in June and October 2025.

The U.S. Department of State maintains a country page for Paraguay covering bilateral relations and engagement, but the content does not reference any sanctions or restrictions specifically targeting Paraguay's financial or crypto sectors Paraguay - United States Department of State

No information on any licensing requirement for crypto businesses, virtual asset service providers, or Web3 operators in Paraguay is available in the Central Bank of Paraguay's regulatory database or the National Securities Commission's published regulations. As noted in the Executive Summary and Regulatory Framework sections above, the absence of a crypto-specific licensing framework is a foundational gap in Paraguayan law.

No regulatory body is identified as authorized to issue licenses for crypto activities in Paraguay Paraguay - United States Department of State

There are no capital requirements, application processes, timelines, or structural requirements for crypto licensing described in any Paraguayan legal instrument Paraguay - Overview

No entity has been identified as having received a crypto-related license in Paraguay; no licensed crypto businesses in the country are documented Paraguay - Overview

The absence of a licensing framework is notable: no bill, draft law, or regulatory proposal addressing crypto licensing in Paraguay is mentioned in the Congreso Nacional's legislative database as of the latest available records Paraguay - United States Department of State

Consistent with the findings in the Executive Summary and Regulatory Framework sections, no Paraguay-specific AML/KYC requirements for crypto businesses exist. This includes no CDD, EDD, STR reporting, record retention, beneficial ownership, or PEP screening obligations applicable to virtual assets. Paraguay's primary AML law is Law No. 6450/2019 (Prevención de Lavado de Activos), but it does not specifically address virtual assets or virtual asset service providers. The Secretaría de Prevención de Lavado de Dinero o Bienes (SEPRELAD) serves as the Financial Intelligence Unit and AML supervisory authority for traditional financial entities, but has no published regulations for crypto businesses.

The State Department lists Paraguay under its Bureau of Western Hemisphere Affairs and as a country with bilateral relations and engagement with the United States, but no AML obligations for Paraguayan financial or crypto entities are detailed Paraguay - United States Department of State

SEPRELAD (Secretaría de Prevención de Lavado de Dinero o Bienes) is Paraguay's Financial Intelligence Unit, established under Law No. 6469/2019. However, SEPRELAD's published regulatory framework (Resolutions and Circulars) does not include any specific obligations for virtual asset service providers or crypto-related businesses.

According to FATF's official "High-risk jurisdictions subject to a Call for Action" page (accessed November 2025), the current list includes the Democratic People's Republic of Korea, Iran, and Myanmar. FATF's "Jurisdictions under Increased Monitoring" page (accessed November 2025) lists jurisdictions including Bulgaria, Burkina Faso, Cameroon, Croatia, Democratic Republic of the Congo, Haiti, Jamaica, Mali, Mozambique, Namibia, Nigeria, Philippines, Senegal, South Africa, South Sudan, Syria, Tanzania, Türkiye, Venezuela, Vietnam, and Yemen. Paraguay is not on either list. FATF Official Website

Because no AML framework for crypto is documented, no distinctions can be made between requirements for traditional finance versus virtual asset service providers in Paraguay Paraguay - Overview

No enforcement actions by Paraguayan authorities against any crypto business are documented, including no fines, penalties, arrests, or administrative sanctions Paraguay - Overview

No U.S. sanctions designations target Paraguayan persons or entities for crypto-related activities. A review of the OFAC SDN List and State Department sanctions databases confirms no Paraguay-specific designations related to virtual assets U.S. Department of the Treasury OFAC SDN List

The U.S. Department of State's corruption policy page lists numerous sanctions actions against individuals in various countries but contains no enforcement actions involving Paraguay Corruption - United States Department of State

Paraguay's corporate income tax rate is 10% (Law No. 6380/2019, Article 24), and capital gains for corporations are subject to this normal CIT rate, but how crypto gains are classified is not specified Paraguay - Overview

Paraguay's personal income tax (IRP) rate is 10% for income exceeding approximately USD 9,000 annually (Law No. 6380/2019, Article 46), and capital gains for individuals are subject to the normal PIT rate, but no guidance exists on whether crypto gains fall within this regime Paraguay - Overview

The standard VAT rate in Paraguay is 10% (Law No. 6380/2019, Article 110), with a reduced 5% rate for certain goods including basic food items and agricultural products, but it is not indicated whether crypto transactions are subject to VAT Paraguay - Overview

No tax guidance (Administrative Resolutions from the Subsecretaría de Estado de Tributación) has been issued for virtual assets, and the PwC overview does not mention cryptocurrencies, tokens, mining, staking, or any crypto-specific tax treatment Paraguay - Overview

CIT returns are due by the fourth month following the end of the fiscal year (typically April), and PIT returns are due in March, but no crypto-specific filing obligations are described Paraguay - Overview

The most significant gap is the complete absence of a crypto-asset regulatory framework — no laws, no regulators with designated authority, no licensing regime, and no enforcement track record exist Paraguay - Overview

Businesses entering the Paraguayan crypto market face legal uncertainty because the general tax framework (10% CIT, 10% PIT, 10% VAT) does not expressly address virtual assets, creating ambiguity around classification and tax treatment Paraguay - Overview

No evidence of AML supervision for crypto activities is provided, meaning businesses would have no clear compliance obligations and authorities (including SEPRELAD) would have no clear enforcement mandate, creating risk on both sides Paraguay - Overview

Paraguay's recent pro-investment legislation (Law No. 7548/2024, Law No. 7547/25, Law No. 7546/25) signals openness to investment, but none of these laws address the crypto sector specifically, leaving a policy vacuum Paraguay - Overview

Without any established licensing pathway, crypto businesses cannot obtain regulatory approval or legitimacy through official channels, potentially limiting access to banking services and international partners Paraguay - United States Department of State

Paraguay is not listed on FATF's high-risk or increased monitoring lists as of the latest FATF publications (June and October 2025), which suggests a lower international scrutiny baseline. However, this does not fill the domestic regulatory void and should not be interpreted as an endorsement of Paraguay's crypto regulatory environment. FATF Official Website

No U.S. sanctions target Paraguay's financial or crypto sectors as of the OFAC SDN List review conducted for this assessment (November 2025). U.S. Department of the Treasury OFAC SDN List

Paraguay - United States Department of State

Corruption - United States Department of State

Risk Warning and Financial Sanction

FATF - High-Risk Jurisdictions Subject to a Call for Action

FATF - Jurisdictions Under Increased Monitoring

U.S. Department of the Treasury - OFAC SDN List

Congreso Nacional de Paraguay - Legislative Database

Banco Central del Paraguay - Regulatory Database

SEPRELAD - Secretaría de Prevención de Lavado de Dinero o Bienes