Stablecoin issuer / redeemer in Paraguay

General Classification (Primary): Stablecoins generally fall under the definition of "Virtual Assets" (Activos Virtuales) as per Law No. 6977/2022.

Article 3 of Law 6977 defines "Virtual Asset" as: "A digital representation of value or rights that can be digitally transferred, stored, or traded, and that is accepted by natural or legal persons as a means of exchange or investment, but does not constitute legal tender issued by a central bank or public authority." Stablecoins, by their nature, fit this broad definition.

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.

If a stablecoin were to function as a substitute for fiat currency within a closed payment system and be issued by a regulated financial entity, the BCP would likely assert its authority under existing laws governing electronic payments and financial services. However, this is not the current general classification for most public stablecoins.

No specific reserve requirements are mandated directly by Law No. 6977/2022 for virtual assets, including stablecoins, as a distinct asset class.

However, if a stablecoin issuer were to be classified as a regulated financial institution (e.g., if it started operating as an e-money issuer under BCP supervision), then it would be subject to the capital, liquidity, and potentially reserve requirements applicable to those entities under the Organic Charter of the BCP (Law No. 489/1995) and related BCP regulations (e.g., Resolución No. 1, Acta No. 68 del 22 de setiembre de 2021, "Reglamento para la Emisión y Operación de Medios de Pago Electrónicos").

For VASPs offering stablecoins, Law 6977 mandates certain capital requirements and guarantees to be determined by the regulating authority (Ministry of Industry and Commerce), but these are operational requirements, not specifically asset-backing reserves for stablecoins themselves.

Law No. 6977/2022 requires all "Virtual Asset Service Providers" (Proveedores de Servicios de Activos Virtuales - PSAVs or VASPs) to be licensed.

An entity issuing a stablecoin would likely fall under the definition of a VASP, especially if it engages in activities such as:

The licensing process involves the Ministry of Industry and Commerce (MIC), which is designated as the primary regulating authority for virtual assets. Additionally, VASPs must register with the Secretaría de Prevención de Lavado de Dinero o Bienes (SEPRELAD), Paraguay's anti-money laundering and combating the financing of terrorism (AML/CFT) authority.

Requirements for VASP Licensing (under Law 6977):

Legal incorporation in Paraguay.

Minimum capital requirements (to be defined by regulation).

Guarantees to cover operational risks.

Demonstration of technical capacity, cybersecurity measures, and compliance with AML/CFT regulations.

Fit and proper criteria for administrators and owners.

No specific statutory redemption rights for stablecoins are established under Paraguayan law.

Redemption rights would primarily be governed by the contractual agreements and terms and conditions set forth by the stablecoin issuer.

Exchange between virtual assets and fiat currencies.

Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.

Participation in and provision of financial services related to an issuer's offer and/or sale of a virtual asset.

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.

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.

Technology and Security:

Internal Controls and Governance:

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.

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).

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