Crypto-funded debit card in Paraguay
A card program where customer fiat balances are funded from crypto holdings, typically through an off-ramp at point of sale or top-up.
Crypto debit card is conditionally permitted in Paraguay with a local entity, subject to AML obligations and medium licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- Yes
- Licensing burden
- Medium
- Last updated
- 2026-07-13
AML Obligations
- VASP must register with SEPRELAD and comply with Resolution No. 222/2022 (AML/CFT guidelines for VASPs) as amended by Resolution No. 24/2023
- Customer identification and verification (KYC) for all cardholders
- Transaction monitoring for suspicious patterns and activities
- Suspicious Activity Reports (SARs) must be filed with SEPRELAD
- Appointment of a qualified Compliance Officer responsible for AML/CFT compliance
- Employee training on AML/CFT obligations
- Record keeping of customer identification data and transactions for 5 years
- Implementation of robust AML/CFT policies including risk assessment, CDD, and EDD for high-risk customers
- Must operate as a legal entity (corporation or LLC) duly registered in Paraguay with a physical registered office
Key Restrictions
- Must obtain VASP licensing from the Ministry of Industry and Commerce (MIC) under Law No. 6977/2022
- Crypto-to-fiat conversion is regulated as a VASP activity (exchange between virtual assets and fiat currencies) and requires licensing
- Stablecoins used for card funding are classified as Virtual Assets, not e-money — no e-money license available under current BCP framework
- Card program likely requires a partner bank or BIN sponsor outside Paraguay, as the BCP does not recognize stablecoins as payment instruments for direct supervision
- Minimum capital requirements for VASP license to be defined by regulation (not yet specified in detail)
- Guarantees to cover operational risks required as part of VASP licensing
- Demonstration of technical capacity, cybersecurity measures, and AML/CFT compliance required for VASP license
Key Risks
- No comprehensive licensing regime for VASPs is fully operational — Law 6977/2022 provides framework but regulatory details (capital requirements, licensing process) are still being developed
- BCP has not recognized virtual assets (including stablecoins) as legal tender or e-money, creating legal ambiguity for crypto-funded card programs
- SEPRELAD AML/CFT obligations apply but enforcement track record for VASPs is nascent — guidance exists but penalties for non-compliance are not yet well-established
- Tax exposure: VASP service fees are subject to 10% IVA (VAT), and crypto gains are subject to 10% income tax — reporting obligations to SET apply
- Partner-bank or BIN-sponsor arrangements likely must be structured outside Paraguay since no domestic e-money license covers stablecoin-based products
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Banco Central del Paraguay (BCP) - Central Bank of Paraguay.
Secretaría de Prevención de Lavado de Dinero o Bienes (SEPRELAD) - Secretariat for the Prevention of Money or Asset Laundering.
October 2023 (SEPRELAD Resolution): SEPRELAD issues Resolution No. 343/2023, establishing the regulatory framework for the prevention of money laundering and terrorist financing for VASPs. This means non-compliance with these rules could lead to future fines.
July 2022 (BCP Warning): The BCP issued warnings about the risks associated with cryptocurrencies.
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.
Law No. 6903/2022 ("Ley que regula la industria y comercialización de criptoactivos") was the initial, comprehensive attempt to regulate crypto mining and commercialization.
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.
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.
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).
General Classification (Primary): Stablecoins generally fall under the definition of "Virtual Assets" (Activos Virtuales) as per Law No. 6977/2022.
E-money/Payment Tokens: The Banco Central del Paraguay (BCP) has generally maintained a cautious stance. As of now, stablecoins are not officially classified as e-money or payment tokens under the existing financial services or payment systems laws (such as Law No. 5476/2015 "De Pagos Electrónicos").
The BCP has emphasized that it does not recognize virtual assets, including stablecoins, as legal tender or as instruments under its direct supervision from a monetary policy perspective, unless they are issued by regulated financial institutions under specific circumstances that would bring them within the scope of traditional financial regulation.
Law No. 6977/2022 requires all "Virtual Asset Service Providers" (Proveedores de Servicios de Activos Virtuales - PSAVs or VASPs) to be licensed.
Requirements for VASP Licensing (under Law 6977):
Crypto-Related Services: Services related to cryptocurrencies, such as exchange fees, custodial services, development of blockchain applications, or consultation services, are subject to IVA at the standard rate.
Individuals (Impuesto a la Renta Personal - IRP):
Businesses (Impuesto a la Renta Empresarial - IRE):
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — a crypto-funded debit card program can operate in Paraguay if structured through a licensed VASP (MIC license under Law 6977/2022 + SEPRELAD AML/CFT registration), but stablecoins are not recognized as e-money by the BCP, meaning the card program will likely require a foreign BIN sponsor or partner bank and operates in a developing regulatory environment with residual legal ambiguity.
Questions this verdict aims to answer
- What e-money / payment-institution license is required?
- How is the crypto-to-fiat conversion regulated?
- What KYC and AML obligations apply to cardholders?
- What partner-bank or BIN-sponsor arrangements are required?