Paraguay
Economic Situation in Paraguay Over the past 20 years, Paraguay has seen strong economic growth. This growth has been driven by better prices for the products the country exports and by stable economic policies. These policies include important changes, like a system to control inflation and laws to manage government spending responsibly. From 2003 to 2023, Paraguay’s economy grew by an average of 3.6% each year, outpacing many other countries in the region. Because of this progress, Paraguay’s credit rating was improved to “investment grade” by the rating agency Moody’s in July 2024. Economic growth has played a big role in reducing poverty in Paraguay over the last 20 years. In 2003, nearly half of the population lived below the poverty line, based on the standard for upper-middle-income countries (US$6.85 per day per person in 2017). By 2023, this number dropped to an estimated 17.6% of the population. Thanks to good weather for soybeans in the 2023/2024 season, Paraguay’s economy is expected to grow by 3.9% in 2024. However, the growth could be even higher if it weren’t for irregular rainfall, which caused a 3.7% drop in electricity and water production in the first half of 2024 compared to the same time last year. With steady growth and controlled inflation, poverty is expected to fall to 16.8% of the population in 2024. However Droughts from 2019 to 2022, along with the COVID-19 pandemic, have slowed economic growth and made it harder to reduce poverty. To cope with these challenges, Paraguay needs to strengthen its ability to handle shocks. Key priorities include maintaining stable economic policies to help businesses and people in need, investing in better infrastructure to withstand climate events, and continuing to diversify the economy. Current State of Cryptocurrency Adoption in Paraguay Cryptocurrency adoption in Paraguay has been growing in recent years, though it is still in the early stages compared to other countries. Paraguay has shown interest in digital currencies, driven by a combination of economic factors, technology, and government involvement. Paraguay has taken a significant step in the blockchain arena by establishing the Paraguayan Blockchain Chamber, aimed at fostering financial innovation on a sovereign blockchain. The chamber’s spokesperson and director, Ricardo Prieto, discussed the initiative’s main focus: developing blockchain solutions for both public and private sectors, including government, finance, commerce, civil, and military ecosystems. Paraguay is quickly becoming a hotspot for cryptocurrency mining due to its low electricity costs, mostly derived from hydroelectric power. Many international cryptocurrency miners have been drawn to the country to take advantage of the affordable energy, which is essential for the energy-intensive process of mining. This has led to an influx of investment in the local economy, with some companies setting up large-scale mining operations. Business and Consumer Adoption. In terms of everyday use, cryptocurrency is not yet widely accepted by businesses or consumers in Paraguay. However, there are some signs of progress. A few businesses, particularly in the tech and digital sectors, accept cryptocurrency as a form of payment. Additionally, there is growing interest among Paraguayans, especially younger generations, in using cryptocurrencies for investment, trading and remittance Cryptocurrency Law in Paraguay Paraguay is taking stronger action against illegal cryptocurrency mining and power theft. The Paraguayan Senate passed new reforms to help authorities, like the National Power Administration (ANDE), crack down on criminals who mine cryptocurrency using stolen electricity. These changes will give authorities more power to impose severe penalties on those involved in these illegal activities. The Paraguayan Senate has approved new reforms that change the penalties for stealing energy for cryptocurrency mining. Now, individuals or companies caught stealing energy to mine cryptocurrencies could face up to 10 years in prison. Those caught stealing energy for other reasons could be sentenced to up to three years in jail. The Senate has approved changes to a law passed by the lower chamber. Under the new rules, stealing energy for reasons other than cryptocurrency mining can lead to up to 3 years in prison or fines. However, stealing energy for cryptocurrency mining can result in up to 10 years in prison. These punishments will apply if someone is caught making illegal connections to the power grid, tampering with existing connections, messing with meters, or using other methods to avoid paying for electricity. Paraguay’s Energy Source and its Attractiveness to Crypto Miners Paraguay is one of the top energy exporters in the world, with almost all of its electricity coming from hydroelectric power. About 90% of the electricity Paraguay generates is sold to neighboring countries, mainly Argentina and Brazil. The country has three major hydroelectric projects, two of which are shared with its neighbors. The Itaipu Dam, managed by Brazil, is one of the largest in the world and produces 86% of Paraguay’s electricity, meeting all of its domestic energy needs. Nearby, the smaller Acaray Dam provides about 3% of the country’s electricity. The Yacyreta Dam, shared with Argentina, generates around 11% of Paraguay’s power. Together, these projects provide enough electricity for Paraguay’s 7.3 million citizens and leave plenty for export. Paraguay has the lowest energy costs in the region, at about $0.05 per kilowatt-hour, making it very appealing to mining companies. The country uses only about a third of the electricity it produces. The rest, which is a large surplus, could be used for activities like cryptocurrency mining, potentially consuming thousands of megawatts of energy. Paraguay has the advantage of using renewable energy, which keeps its energy costs lower than any other country in South America. This makes it an attractive location for mining digital assets like cryptocurrencies, as the environmental impact is minimal. This became clear when companies began looking for places to set up mining operations in South America. In October, Future Fintech, an e-commerce and fintech company, announced plans to build a Bitcoin mining facility in Paraguay. Regulatory Environment and Government Actions Paraguay’s government has taken some important steps toward cryptocurrency adoption. In 2021, the Paraguayan Congress passed a bill that would legalize cryptocurrency and its use for business
Nepal
The State of Cryptocurrency Adoption in Nepal Source:Credible News Cryptocurrency adoption in Nepal is still in its nascent stage, but interest has grown significantly in recent years. Although the government has placed some restrictions, many people in Nepal are still finding ways to use digital assets. More and more Nepalese see cryptocurrency as a way to join the global financial system, which isn’t always accessible through regular banks and financial services. Nepalese people, especially younger generations, are increasingly aware of cryptocurrencies like Bitcoin and Ethereum. With easy internet access and exposure to global trends, many Nepalese are curious about crypto’s potential for investment and as a way to participate in the global economy. Social media platforms, online forums, and cryptocurrency events have been popular spaces for people to learn and discuss these digital assets, fueling a grassroots movement of awareness and interest. However, despite the growing interest, accessing cryptocurrency remains challenging for many Nepalese. Major crypto exchanges are often restricted or difficult to use from Nepal due to both government regulations and platform limitations. Consequently, individuals interested in buying, selling, or holding crypto must often rely on smaller exchanges or peer-to-peer (P2P) platforms, which may not always offer the same security or user experience as larger international platforms. According to a recent report from Statista, the projected revenue for the cryptocurrency market in Nepal in 2024 is 0.00. This is due to a number of factors, including limited adoption, unfavorable regulations, and illegal transactions. However, despite the lack of favorable regulations and limited adoption, Nepal has seen a growing interest in cryptocurrencies among tech individuals. Cryptocurrency Law in Nepal Source:FreePik On August 13, 2017, the Government of Nepal decided to ban Bitcoin, citing the Foreign Exchange (Regulation) Act, 2019 BS as the reason. The Foreign Exchange (Regulation) Act 2019 serves as the basis for the ban on cryptocurrency in Nepal. Then, on January 23, 2022, the Nepal Rastra Bank (NRB) took it a step further by declaring all activities related to Virtual Currency, Cryptocurrency, and Network Marketing illegal, leading to several arrests. While the government’s concerns about fraud, illegal activities, and protecting foreign reserves and tax revenue are understandable, such strict measures can hold back innovation and growth. Possible Reasons Behind the Cryptocurrency Ban in Nepal Some academic researchers have tried to explain the reasons why the Government of Nepal banned cryptocurrencies. Below are some of the reasons they outlined: Fraud and Crime Risks With cryptocurrency, it’s hard to identify the people involved in transactions due to its anonymous and decentralized nature. This makes it easier for criminals to engage in activities like money laundering, terrorism, and trafficking without getting caught. Nepal’s government worries this could lead to a rise in serious crimes. They also believe that cryptocurrency could expose investors to various scams and frauds. Unfavorable Regulations Cryptocurrencies are not regulated, meaning their value can change suddenly. If a big investor or group decides to sell, the value of a cryptocurrency can drop quickly, affecting millions of users. For example, in January 2022, Bitcoin and other cryptocurrencies lost over $1 trillion in market value after a large decline since Bitcoin’s peak in November 2021. Impact on Remittance Remittance is vital to Nepal’s economy, making up about a quarter of the GDP. If people start using cryptocurrency for remittances, the Nepalese government would struggle to monitor these transactions, leading to less taxable income. While there’s no proof that cryptocurrency reduces remittance directly, income from remittance has been dropping in recent years, even as interest in cryptocurrency grows in Nepal. Government Regulations and Policies Source: Freepik The ban on cryptocurrency in Nepal is rooted in the Foreign Exchange (Regulation) Act of 2019. This law, cited by the Nepal Rastra Bank, has been used to prohibit Bitcoin and other virtual currencies, placing restrictions on cryptocurrency transactions between Nepalese citizens and foreign entities. As of 2023, the government has not yet implemented a regulatory framework to legalize cryptocurrencies. In response, the Nepal Rastra Bank issued an official notice declaring Bitcoin and similar cryptocurrencies illegal. It also stated that actions would be taken on those who break the law. Challenges of Cryptocurrency Adoption in Nepal Source: Freepik Potential Benefits of Crypto Adoption in Nepal Cryptocurrency adoption in Nepal could unlock several important benefits, especially as the country seeks to grow its economy and improve financial access for its people. Below are the potential benefits of cryptocurrency adoption in Nepal Conclusion The adoption of cryptocurrency in Nepal holds a lot of promise. As digital assets and blockchain technology grow globally, Nepal has the chance to be part of this wave and unlock new opportunities for economic growth. Cryptocurrency can offer a more accessible financial system, support the economy through remittances, and potentially create jobs. However, challenges remain, including unfavorable regulations and concerns around security. By approaching these challenges with thoughtful policies and public awareness, Nepal could leverage cryptocurrency to strengthen its economy and create new opportunities for its people.
Morocco
Economic situation in Morocco Source: Atalayar After a strong recovery from COVID-19 Morocco’s economy has faced big challenges. According to the World Bank’s report, Responding to Supply Shocks, Morocco has been hit by both a severe drought and rising global prices, which have led to higher inflation. Despite these pressures, Morocco’s economy is expected to grow by 3.1% in 2023, mainly due to improvements in its agriculture and other primary sectors. However, there are still risks that could slow down growth. These include ongoing geopolitical issues like the war in Ukraine, inflation, slower growth in Morocco’s main trade partners in Europe, and possible future climate problems. Similar to many other countries, Morocco saw a significant rise in prices in 2022, largely due to the war in Ukraine and global supply chain issues. By the end of 2022, annual inflation had peaked at 8.3%. In February 2023, inflation in Morocco rose to 11%. However, the government in Rabat took action by using targeted subsidies and adjusting monetary policies. These efforts paid off, as inflation dropped to 2.3% by February 2024, with core inflation at 2.9%, meeting the central bank’s target. However, vulnerable households still suffered the most from the impact of rising food and other prices due to inflation. This hike in Morocco’s economic pressure has led to the factors driving crypto adoption in Morocco which is stated below Current State of Crypto Adoption in Morocco Source: Dreamtime Crypto adoption in Morocco has been steadily gaining momentum, despite certain obstacles, its growth has increased from 2.4% to 3.1% between 2021 and 2022. While the Moroccan government has a cautious approach towards cryptocurrency, banning its use in 2017, interest in crypto among the public has continued to grow. This is partly because many Moroccans see cryptocurrency as a way to access a global financial system, especially for those who may lack full access to traditional banking. The ban hasn’t faced much pushback, except from people involved in the cryptocurrency space in some sort of way. Any opposition has mostly gone unnoticed because it’s been limited to a small online group. Here’s an example of what people think about the government’s approach: The Moroccan exchange office says the main reason for the ban on cryptocurrency is that the area lacks clear rules, which it sees as risky for users. It also advises people to follow the current rules and use approved financial services for transactions and money transfers. Nevertheless, Brookstone Partners, a U.S. company, announced it was considering building a large wind farm project in Dakhla, a city on Morocco’s southern coast. The goal? To generate clean energy for mining cryptocurrency. However, this plan raises some questions. It doesn’t seem like Brookstone is fully considering Morocco’s strict rules around cryptocurrency. This could mean one of two things: either the company is overlooking local laws, or there may be behind-the-scenes talks happening that the public doesn’t yet know about Public Interest and Usage Although the government does not officially allow crypto transactions, Moroccan citizens are exploring crypto platforms to buy, hold, and trade digital assets. Platforms like peer-to-peer (P2P) exchanges have become popular as they offer a workaround for government restrictions, allowing people to trade directly with each other without a centralized institution. In recent years, Morocco has ranked as one of the top African countries in terms of crypto activity. According to reports, the country has a high number of Bitcoin transactions and other crypto trades compared to its neighboring countries. This growth shows that Moroccans are finding value in digital assets, even with the regulatory risks involved. Cryptocurrency Law in Morocco Source:Freepik Currently, Morocco has a cautious stance toward cryptocurrency. The country has not fully embraced it and, in fact, has imposed restrictions to limit its use. Cryptocurrency transactions have been considered illegal in Morocco since 2017. Bank Al-Maghrib and the AMMC, along with the Ministry of Finance, issued a joint statement back then warning people about the risks involved in using digital currencies. They highlighted concerns about fraud, market volatility, and the possibility of cybercrime. Bank Al-Maghrib’s (Central Bank) Position on Cryptocurrency Bank Al-Maghrib has been clear about its cautious approach to cryptocurrency. As the central bank, it is primarily concerned with ensuring the stability of Morocco’s financial system. In its view, cryptocurrencies like Bitcoin and Ethereum are too volatile, unregulated, and pose a high risk for consumers. The bank fears that the adoption of these digital currencies could lead to financial instability or make Morocco’s economy vulnerable to financial crimes. Bank Al-Maghrib has not ruled out the possibility of supporting digital currencies entirely, but it insists on waiting for clear, international regulations. For now, it stands firmly against the use of decentralized cryptocurrencies in Morocco. Role of the Moroccan Capital Market Authority (AMMC) The AMMC, which oversees financial markets in Morocco, also takes a skeptical stance on cryptocurrency. Like Bank Al-Maghrib, it views cryptocurrency as high-risk and is concerned about its potential for misuse. The AMMC’s mission is to protect investors and promote market integrity. As such, it has issued statements advising people to avoid crypto transactions and remain cautious of the hype surrounding digital assets. The AMMC also collaborates with other financial authorities in Morocco to ensure a unified stance against unregulated digital assets. By doing so, it hopes to reduce any potential negative impact of crypto on Moroccan markets and protect public investors. Factors Driving Crypto Adoption in Morocco Economic Situation One reason behind Morocco’s rising interest in crypto is the country’s economic situation. With limited access to stable, international investment options, some Moroccans are turning to crypto as a new way to diversify their savings. Inflation Cryptocurrencies like Bitcoin and Ethereum offer an alternative to local currency, which can be affected by inflation. By investing in these digital assets, Moroccans aim to protect their wealth from local economic instability. Remittance Another factor is remittances. Many Moroccans have family members working abroad who regularly send money back home. Traditional remittance methods can be costly and slow, so
Spain
Economic Situation in Spain The Spanish economy grew significantly in 2023, with a positive outlook for the future despite global uncertainty. However, there are long-term challenges that make it hard for Spain to match the living standards of other euro area countries. The Spanish economy performed well in 2023. GDP grew by 2.5%, much higher than the euro area average of 0.4%. Economic activity was also 3% above pre-pandemic levels. This growth was driven by higher public consumption, increased household purchasing power, and strong services exports. Growth is expected to continue, with forecasts of 1.9% in 2024 and 2.1% in 2025, exceeding euro area projections. Spanish house prices rose by 4.2% in 2023, which is higher than other European markets. However, challenges remain. These include structural issues that limit Spain’s ability to reach the income levels of other European countries. The Banco de España’s latest report depicts these problems in detail and offers policy recommendations to address them. However low productivity and the low employment rate in Spain are the main reasons for the lack of convergence with Europe Cryptocurrency adoption could potentially offer Spain several benefits. Which includes financial inclusion, cheaper transactions, as well as financial education Current State of Cryptocurrency Adoption in Spain Source: Purse.io Spain has emerged as one of the leading countries in Europe when it comes to cryptocurrency adoption. From individuals embracing digital assets as an alternative investment to businesses integrating blockchain technology. In fact Torrevieja, a city in Spain’s Alicante province, aims to become the first crypto-friendly city in Europe. The plan is to encourage local shops and businesses to accept cryptocurrency as a payment option. The city plans to use blockchain technology to make business activities digital. In the first phase of the project, the goal is to encourage the use of cryptocurrencies for transactions. Merchants in Spain can also access educational courses at the University of Alicante to learn how to use crypto payments in their businesses. Torrevieja’s plans show how crypto is becoming more accepted across Spain. The number of registered crypto companies in Spain has grown a lot in recent years, showing how popular crypto is becoming. In 2022, the country surpassed El Salvador, in the number of Bitcoin ATMs. It reached a total of 215 ATMs, making it the third-largest crypto ATM hub. In 2023, the country saw a 56% increase in registered crypto companies. Most of these companies, 61 out of 85, are local brands, but many international companies are also involved. This mix of local and global providers has created a strong and competitive system to support crypto users. In early 2023, the low-cost airline Vueling, based in Barcelona, shared some exciting news. The company announced that customers would be able to pay for their tickets using cryptocurrencies. Spain is becoming a hub for crypto innovation. However cryptocurrencies are not recognized as legal tender, and investments in them are not covered by deposit insurance or investor compensation schemes. Businesses can accept cryptocurrencies as a form of payment. However, they must account for these transactions according to tax regulations. Cryptocurrency Law in Spain Source:Freepik Cryptocurrency is legal in Spain, but it is not considered “legal tender.” This means you can buy, sell, and use cryptocurrencies, but they don’t have the same status as the euro. Instead, cryptocurrencies are treated as digital assets, like property, which can be exchanged for goods, services, or money. While the government in Spain supports innovation in blockchain and crypto, it has strict rules to prevent illegal activities, such as money laundering and tax evasion. Taxation of Cryptocurrency in Spain In Spain, people must pay taxes on the profits they make from using digital assets. Income earned from dividends or other involvement in corporate assets by non-residents in Spain is taxed at a flat rate of 19%. Besides buying, selling, and earning dividends, cryptocurrency mining in Spain is also taxable. Anyone involved in mining, whether individuals or businesses, must register with the Spanish tax authorities. In 2021, a law to stop tax fraud was introduced in Spain. This law requires people to inform the tax authorities about their bitcoin, altcoin, and other cryptocurrency balances and transactions. If they fail to do so, they could face a fine of 10,000 EUR. Government Regulations and Policies Source: Nextrope Currently, Spain does not have any specific rules or regulations that explicitly restrict Spanish banks from holding or dealing in crypto assets or their derivatives. It’s also important to know that cryptocurrencies are not considered legal tender in Spain. Only the euro is recognized as the country’s legal tender, as stated in Law 46/1998 from December 17. On February 17, 2022, new rules for cryptocurrency advertising in Spain came into effect. These rules set specific standards for how crypto ads should be handled. For large advertising campaigns, companies must notify the CNMV (Spain’s financial regulator) at least 10 working days before starting. This notice must include key details like the campaign’s dates, location, and description. If companies fail to do this, the CNMV can issue penalties as allowed by law. Breaking these rules may lead to fines, with the amount depending on factors like how much money the campaign made and the seriousness of the violation. On February 8, 2018, Spain’s stock market regulator, the CNMV, announced new rules to manage the growing amount of cryptocurrency advertising. These rules helped make the regulations around crypto more clear. The guidelines describe crypto assets as “a digital version of assets or rights that can be shared or stored electronically using decentralized technology or similar systems.” The new law is expected to take effect three months after it appears in the official Spanish National Gazette (B.O.E.). Challenges to Cryptocurrency Adoption in Spain While cryptocurrency is growing and gaining popularity worldwide, Spain faces its own set of hurdles when it comes to widespread adoption. Understanding these challenges helps shed light on what needs to change for crypto to become more common in the country. Regulatory Hurdles Spain has yet to finalize