Submit Crypto Legislation to Paraguayan Congress

[GENERAL] Name and surname of main applicant

Rodrigo Gonzalez

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Individual

[GENERAL] Co-proposers and additional applicants

Yaqueline Escobar (Legal Advisor)

Fernando Orue (Legal Advisor)

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

7

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

Yes

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

Develop and propose legislation to be submitted to the Paraguayan Congress to recognize and regulate the use of cryptocurrencies. This will provide legal clarity to engage in regulated transactions.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

No dependencies.

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] Please provide here more information on the open source status of your project outputs

The legislative draft, research, and related materials will be publicly available for adoption by other countries or organizations. The proposal will foster collaboration and ensure transparency in the creation of a cryptocurrency legal framework throughout Latin America.

[METADATA] Horizons

Policy Advocacy

[SOLUTION] Please describe your proposed solution

The Problem:  

Paraguay currently lacks a legal framework that acknowledges the use of cryptocurrencies, leading to significant uncertainty surrounding their legal status, taxation, and regulation. This legal ambiguity prevents businesses and individuals from fully utilizing cryptocurrencies like ADA for secure, transparent, and legal transactions. Without a proper framework, there is confusion about how to report cryptocurrency transactions for tax purposes, how consumers are protected when using digital assets, and how businesses can integrate cryptocurrencies into their operations.

As a result, businesses that could benefit from the efficiency, transparency, and low transaction costs associated with blockchain technology are hesitant to adopt it. Meanwhile, individuals are left vulnerable to potential legal issues or exploitation due to the unregulated nature of digital assets.

Our Approach:  

We propose a strategic, multi-phase approach to develop and implement a robust legal framework that regulates the use of cryptocurrencies and digital assets in Paraguay. This approach will focus on ensuring the safe, legal, and transparent use of cryptocurrencies, with a specific emphasis on ADA and blockchain technology. Our proposal will address key areas such as tax regulation, consumer protection, and transparency in cryptocurrency transactions. Here's how we will proceed:

• Drafting the Legislation: We will create a comprehensive legislative proposal that acknowledges cryptocurrencies as a valid form of payment. This proposal will include clear guidelines for:
• Tax Collection: Establishing processes for reporting and taxing cryptocurrency transactions to ensure that both individuals and businesses are compliant with national tax laws.
• Consumer Protection: Developing rules to protect consumers in cryptocurrency transactions, including measures to prevent fraud and ensure the security of their digital assets.
• Transparency: Introducing requirements for businesses using cryptocurrencies to report their transactions publicly, ensuring transparency and accountability.

• Stakeholder Collaboration and Feedback: We will engage with various stakeholders, including government agencies, blockchain experts, business leaders, and legal professionals, to refine the legislation. This will ensure that the proposal is balanced, comprehensive, and suited to Paraguay’s economic and regulatory environment. Achieving the necessary 2% voter threshold approval is a critical step for the law to move forward, and stakeholder collaboration will be key to gaining this support.

• Public Consultations and Awareness Campaigns: In addition to consultations with experts, we will hold public forums and workshops to educate the general population about the benefits of cryptocurrency regulation. These efforts will help build public support for the legislation, ensuring that citizens understand the potential benefits of cryptocurrency in everyday transactions. Our awareness campaigns will focus on:
• Economic Benefits: How legalized cryptocurrency transactions can reduce costs and increase access to financial services.
• Consumer Protection: How the law will protect consumers in a rapidly evolving digital landscape.
• Innovation and Investment: How the law will attract blockchain innovation and investments, fostering economic growth in Paraguay.

• Submission to Congress: Once the law has been refined through consultations and public feedback, we will submit it to the Paraguayan Congress. We will engage with members of Congress and key political figures to present the benefits of adopting this legal framework and push for its approval. Our goal is to create a comprehensive, legally sound proposal that will be successfully enacted, positioning Paraguay as a leader in cryptocurrency regulation in Latin America. This law will be submitted with the lobbying power of "la camara blockchain de paraguya" or in english "the cabin of blockchain" who are part of the government and currently have started to integrate cryptos laws in Paraguay related to mining. Taxation and other regulation is next where we step in.

Why This Approach?

Positioning Paraguay as a Leader in Latin America:  By regulating cryptocurrencies, Paraguay can position itself as a progressive and forward-thinking country in the blockchain space. This will attract blockchain startups, technology investors, and other businesses looking to leverage the benefits of transparent and secure cryptocurrency transactions. Cardano’s blockchain technology, with ADA as its native currency, offers a scalable and secure solution for digital payments and smart contracts, making it an ideal choice for the country’s legal framework.

Encouraging Economic Growth Through Blockchain Innovation: A clear legal framework for cryptocurrencies will provide businesses and investors with the confidence to operate in Paraguay, opening up new opportunities for economic growth. Businesses will be able to reduce transaction costs, improve transparency, and streamline operations using blockchain technology. Additionally, this framework will encourage global blockchain firms to invest in Paraguay, further boosting the country’s economy.

Building Trust Through Transparency and Security: A well-regulated cryptocurrency market will increase consumer trust and reduce the risk of fraud or misuse. By establishing clear guidelines for taxation, consumer protection, and transaction transparency, the legal framework will foster a secure environment where individuals and businesses can confidently adopt and use cryptocurrencies like ADA.

Who Will Benefit?

• Cardano Community: The expanded use of ADA in Paraguay will open up new real-world applications of blockchain technology, positioning ADA as a major player in the country’s economy.
• Paraguayan Businesses: Companies will be able to use cryptocurrencies legally and transparently, improving efficiency and reducing transaction costs.
• Paraguayan Economy: The legal framework will attract innovation and investment, positioning Paraguay as a forward-thinking leader in cryptocurrency regulation in Latin America. It will also increase Paraguay’s appeal as a hub for blockchain-based startups and enterprises.

Proving Our Impact:

• Legislative Milestones: The key measure of success will be the submission and eventual approval of the cryptocurrency regulation law in Congress. This will include the completion of the legislative draft, stakeholder consultations, public engagement, and formal submission to the legislative body.

• Stakeholder Engagement: We will track the number of consultations held with legal experts, government officials, and business leaders. A successful proposal will involve collaboration from various sectors to ensure that the legislation is comprehensive and widely supported.

• Adoption Metrics: After the law is passed, we will measure the adoption of cryptocurrencies like ADA by businesses and individuals. This will include tracking the number of businesses that accept ADA as a payment method and the overall volume of cryptocurrency transactions.

By regulating cryptocurrencies and digital assets, this proposal aims to position Paraguay as a leading country in Latin America for blockchain innovation, attracting investment and improving the financial ecosystem for businesses and individuals alike.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

The Crypto Legislation project will have a transformative impact on both the Cardano ecosystem and the broader blockchain community by creating a legal framework for the use of cryptocurrencies and digital assets in Paraguay. The approval of this legislation will open up new opportunities for large-scale tokenization projects, increase market liquidity, and position Cardano as a leading blockchain platform within Paraguay’s growing economy. Below are some of the key impacts this project will have on the Cardano community:

1. Expanding the Use of ADA and Blockchain in Paraguay:

The legal framework will officially recognize cryptocurrencies like ADA as valid forms of payment and provide the necessary structure for their integration into business operations. This will facilitate the adoption of ADA across multiple sectors in Paraguay, ranging from small businesses to large-scale enterprises. By giving businesses the ability to engage in secure, transparent cryptocurrency transactions, the project will strengthen Cardano's presence in Paraguay and boost its global reach.

2. Enabling Tokenization of Real-World Assets (RWA):

Companies like NMKR and other blockchain projects focused on tokenization will greatly benefit from this legal framework. The ability to tokenize real-world assets (RWA), such as agricultural products, real estate, and commodities, will become legally viable in Paraguay. This will unlock new markets and liquidity within the Cardano ecosystem, as businesses and investors will be able to securely tokenize and trade these assets on the blockchain.

Benefits for NMKR and Similar Companies:

• Tokenization of RWA: Companies like NMKR, Indigo Protocol, and Emurgo can launch tokenization projects under a compliant and transparent legal framework, allowing the secure issuance, trading, and management of tokenized assets in Paraguay.
• Increased Liquidity: The creation of legal exchanges within Paraguay will unlock new liquidity pools, allowing tokenized assets to be traded efficiently, which will increase transaction volumes on the Cardano blockchain.
• New Business Models: This law will enable blockchain companies to explore new business models and services that leverage the tokenization of physical assets in one of the region's fastest-growing economies.

3. Unlocking Smart Contract Integration with Government Processes:

The law will pave the way for smart contract integration with government processes, enabling businesses and individuals to use decentralized systems for secure and transparent transactions. For example, smart contracts could be used to automate tax collection, ensure compliance in export/import activities, and streamline bureaucratic procedures. This integration will boost trust in blockchain technologies and accelerate their adoption across multiple sectors.

4. Paraguay’s Strategic Location and Infrastructure:

By aligning Cardano with Paraguay’s emerging economic advantages, the Cardano community will gain access to the country’s substantial trade and energy benefits:

• Access to Paraguay's Import and Export Economy: Paraguay is currently developing the Transoceanic Highway, which will bypass the Panama Canal, offering a critical trade route for international businesses. This infrastructure will boost Paraguay’s role as a major trade hub in South America. Through the legal use of blockchain technology, Cardano will be well-positioned to serve the logistics, supply chain, and trade industries along this key route.
• Leverage Paraguay's Renewable Energy: Paraguay is home to the Itaipu Dam, the world's largest hydroelectric plant. With access to fully renewable, low-cost energy, blockchain operations—including large-scale tokenization, staking, and validation processes—can thrive in Paraguay with minimal environmental impact. This provides an immense opportunity for Cardano-based projects that require sustainable energy resources to scale efficiently.

5. New Market Opportunities and Global Investment:

The introduction of a cryptocurrency legal framework will unlock access to global markets for Paraguay, enabling foreign investors and businesses to enter the Paraguayan economy with greater confidence. This will create new investment opportunities for Cardano-based projects, attract blockchain innovators to the country, and foster a more inclusive and sustainable economic ecosystem.

6. Access to Emerging Industries:

By integrating ADA and other cryptocurrencies into Paraguay’s legal system, the project will enable businesses in emerging industries such as agriculture, manufacturing, and technology to embrace blockchain solutions. This legal clarity will reduce barriers to entry for blockchain adoption and promote the development of innovative, decentralized applications that benefit from Cardano's scalability and security features.

Measuring Impact:

We will measure the success and impact of this project through the following metrics:

• Legislative Milestones: Successful submission and approval of the cryptocurrency regulation law in the Paraguayan Congress.
• Stakeholder Engagement: Tracking the number of consultations and workshops held with government officials, legal experts, businesses, and blockchain companies to gather feedback and build support.
• Adoption Metrics: Monitoring the number of businesses and individuals adopting ADA and blockchain technologies after the law is passed. This will include tracking the usage of tokenized real-world assets and the increase in liquidity provided by the Cardano blockchain.
• Economic Growth: Measuring the number of new businesses and investments entering Paraguay as a result of the new legal framework, particularly in sectors like trade, energy, and agriculture that will benefit from blockchain integration.

Sharing Outputs and Opportunities:

We will share the outputs and opportunities from this project through the following channels:

1. Reports and Case Studies: Detailed reports on the development and approval of the legislation, including case studies on how businesses are utilizing ADA and blockchain technologies in Paraguay.
2. Workshops and Webinars: We will hold workshops and online webinars to share insights on the process of creating a legal framework for cryptocurrencies, offering guidance to other Cardano communities and countries interested in replicating this model.
3. Public Access to Legislative Framework: The entire legislative process, including research, drafts, and feedback, will be made open-source, allowing the Cardano community and other stakeholders to review, audit, and learn from the project’s success.

Through these initiatives, we will ensure that the positive impact of this project is shared widely across the Cardano ecosystem and beyond, unlocking new opportunities for blockchain innovation and economic growth in Paraguay.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

Our team is well-equipped to deliver the Crypto Legislation project with transparency and accountability. We possess the legal, governance, and blockchain expertise necessary for this complex initiative, and have a proven track record in managing regulatory projects.

Key Team Members:

• Rodrigo Enmanuel González Alonso (Project Lead & Legal Advisor): Licensed lawyer with extensive experience in navigating Paraguay’s legal landscape, specializing in legislative processes and compliance.
• Yaqueline Escobar (Legal Advisor): Expert in governance and public policy with a focus on legal frameworks for new technologies.
• Fernando Orue (Legal Advisor): Experienced in blockchain-related legal issues and international compliance standards.

Steps for Transparent Fund Management:

• Milestone-Based Fund Release:  

  Funds will be allocated in four phases, with 25% of the budget released after each milestone:

• Milestone 1: Legal Drafting & Initial Consultations.
• Milestone 2: Stakeholder Engagement.
• Milestone 3: Public Awareness Campaign.
• Milestone 4: Submission to Congress.

• Quarterly Financial Reporting:  

  We will provide transparent financial reports detailing fund usage, including costs for legal services, consultations, and public campaigns. These reports will be shared with the Cardano community.

• Independent Audits:  

  Third-party auditors will review the use of funds, ensuring proper allocation and transparency. The results will be published for community review.

Validation of Feasibility:

• Legal Analysis: We will adapt successful cryptocurrency regulations from other countries to fit the Paraguayan context.
• Stakeholder Feedback: Regular consultations with government officials, legal experts, and businesses will ensure the proposal is practical and aligned with local needs.
• Public Support: Public workshops and awareness campaigns will generate support for the legislation, increasing its chances of success.

With these processes in place, we ensure full transparency, proper fund usage, and measurable progress throughout the project.

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

Milestone 1: Legal Drafting and Initial Consultations

Duration: Month 1-2

Budget Allocation: 25% (25,000 ADA)

Objective:

Draft the initial legal framework for the regulation of cryptocurrencies in Paraguay, focusing on ADA. Begin consultations with key legal experts and blockchain specialists to ensure the draft addresses essential regulatory needs.

Deliverables:

• Draft of the proposed law.
• Initial consultations with legal and blockchain experts.

Acceptance Criteria:

• Completed and reviewed draft legislation.
• Documented feedback from at least 3 expert consultations.

Milestone 2: Stakeholder Engagement and Feedback

Duration: Month 3-4

Budget Allocation: 25% (25,000 ADA)

Objective:

Engage with key stakeholders, including government officials, business leaders, and regulatory bodies, to refine the draft law based on their input. Hold workshops to gather insights and build support for the legislation.

Deliverables:

• Revised draft incorporating stakeholder feedback.
• At least two stakeholder workshops or consultations.

Acceptance Criteria:

• Documentation of stakeholder feedback and revisions made to the draft law.
• Completion of two workshops or meetings with key stakeholders.

Milestone 3: Public Awareness Campaign

Duration: Month 5-6

Budget Allocation: 25% (25,000 ADA)

Objective:

Launch a public awareness campaign to educate citizens and businesses on the benefits of cryptocurrency regulation. Conduct media outreach and public workshops to build community support.

Deliverables:

• Public awareness campaign launched (including media, social media, and workshops).
• Documentation of public feedback and engagement.

Acceptance Criteria:

• Completion of at least two public workshops.
• Media and social media coverage reports.
• Public engagement metrics (e.g., attendance at workshops, online interaction).

Final Milestone: Submission to Congress and Final Close-Out Report

Duration: Month 7

Budget Allocation: 25% (25,000 ADA)

Objective:

Submit the final draft of the legislation to the Paraguayan Congress and present it to lawmakers. Close out the project with a final report and video showcasing the results, progress, and lessons learned.

Deliverables:

• Submission of the finalized law to Congress.
• Presentation to Congress.
• Project Close-Out Report and Video.

Acceptance Criteria:

• Proof of submission and Congressional review of the legislation.
• Final report and video detailing the project’s progress, results, and next steps.

[RESOURCES] Who is in the project team and what are their roles?

• Rodrigo Enmanuel González Alonso

Role: Project Lead & Legal Advisor

Credentials

Responsibilities:

• Oversee the project and lead the drafting of the cryptocurrency legislation.
• Manage stakeholder engagement and government relationships.
• Present the legislation to Congress.

• Yaqueline Escobar

Role: Legal Advisor & Community Engagement Lead

Credentials

Responsibilities:

• Assist in legal drafting, focusing on consumer protection and transparency.
• Lead public awareness campaigns and workshops.

• Fernando Orue

Role: Legal Advisor & Regulatory Compliance Expert

Credentials

Responsibilities:

• Ensure legal compliance with national and international standards.
• Support stakeholder consultations and refine the draft law.

• Public Relations & Communications Specialist (La Camara Blockchain de Paraguay [the cabin of blockchain of Paraguay])

Role: Government Lobbying & Public Relations

Responsibilities:

• Manage government lobbying efforts to gain legislative support.
• Oversee media relations and public outreach to build awareness.

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

Total Budget Requested: 100,000 ADA

Milestone 1: Legal Drafting and Initial Consultations

Duration: Month 1-2

Budget Allocation: 25,000 ADA

• Legal Services: 15,000 ADA
• Legal research, drafting the initial legislation, and consultations with legal experts.
• Administrative Costs: 5,000 ADA
• Document preparation, internal reviews, and logistics for meetings.
• Stakeholder Consultations: 5,000 ADA
• Initial meetings with blockchain specialists and government advisors.

Milestone 2: Stakeholder Engagement and Feedback

Duration: Month 3-4

Budget Allocation: 25,000 ADA

• Workshops and Consultations: 12,000 ADA
• Engaging with businesses, government officials, and regulatory bodies through organized workshops.
• Legal Revisions: 8,000 ADA
• Incorporating feedback and refining the legislation based on consultations.
• Travel & Logistics: 5,000 ADA
• Costs associated with meetings, travel, and administrative support for stakeholder engagement.

Milestone 3: Public Awareness Campaign

Duration: Month 5-6

Budget Allocation: 25,000 ADA

• Public Relations & Media Outreach: 12,000 ADA
• Creating and distributing materials (press releases, social media campaigns) to raise awareness about the legislation.
• Workshops & Public Engagement: 8,000 ADA
• Hosting public workshops and events to educate the population and gather feedback.
• Marketing & Communications: 5,000 ADA
• Advertising and promotion across media platforms.

Milestone 4: Submission to Congress and Final Reporting

Duration: Month 7

Budget Allocation: 25,000 ADA

• Final Legal Submission: 12,000 ADA
• Costs for submitting the final draft to Congress, including any required legal revisions or documentation.
• Lobbying Efforts: 8,000 ADA
• Government lobbying through direct meetings and advocacy efforts.
• Final Report and Video: 5,000 ADA
• Preparation of a project close-out report and video documenting the progress, outcomes, and lessons learned.

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

The Crypto Legislation project represents excellent value for money for the Cardano ecosystem due to its strategic impact on adoption, regulatory clarity, and the long-term benefits for both the Cardano community and Paraguay’s economy. Here’s why:

1. Long-Term Impact on Cardano Ecosystem

• Enabling Tokenization & Smart Contracts: The successful passage of this legislation will enable companies like NMKR to launch large-scale tokenization projects in Paraguay, opening up new markets and liquidity. The legal clarity will also allow businesses to integrate smart contracts into their operations, unlocking new real-world use cases for Cardano’s blockchain technology.
• Access to Strategic Resources: Paraguay's low-cost renewable energy from the Itaipu Dam and the new Transoceanic Highway will provide opportunities for large-scale blockchain applications, making Cardano a key player in these emerging markets.

2. Justification of Costs

• Legal Services: The costs for legal services (15,000 ADA for legal drafting and 12,000 ADA for the final submission) are proportional to the typical rates for high-level legal work in Paraguay. Drafting legislation requires deep expertise in national and international regulatory frameworks, and these costs are in line with industry standards.
• Public Relations & Media: Engaging a PR and marketing firm (12,000 ADA) for the public awareness campaign is essential to drive public and government support. Given the complexity of cryptocurrency legislation, professional services are required to ensure clear communication and widespread outreach.
• Workshops & Stakeholder Engagement: The costs allocated for stakeholder workshops and public consultations (20,000 ADA across two milestones) cover logistics, event planning, and travel, which are critical for building consensus and refining the legislative draft.

3. Proportional Costs to Average Wages

• The budgeted costs are aligned with the average freelance and professional service rates in Paraguay. For example, legal services and public relations consulting rates are benchmarked against local industry standards, ensuring that the project delivers high-quality results without inflating costs.

4. Value for Cardano

• By providing a legal framework that enables ADA to be used in government and business transactions, this project will expand Cardano’s real-world applications, drive adoption, and position Cardano as the blockchain of choice in a fast-growing economy.
• The benefits of the project, such as increased liquidity and legal certainty for tokenization, far outweigh the initial investment, offering a lasting positive impact on the Cardano ecosystem in Paraguay and beyond.

In conclusion, the project’s costs are justified based on the scope of work, the professional services required, and the long-term value it will bring to the Cardano community, ensuring sustainable growth and new opportunities for blockchain adoption in Paraguay.