10 Reasons Why Paraguay Could Lead the Bitcoin Revolution

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At Bitcoin Paraguay, we believe Paraguay has immense potential to become the next Bitcoin country. It stands out as one of the best candidates in South America for bottom-up Bitcoin adoption, and this vision could even resonate with politicians looking to follow in El Salvador’s footsteps. Here’s why we think so:

1. High Degree of Freedom

Paraguay is one of the last countries with a high degree of freedom. The government is small, and there are not many regulations that could hinder the country’s development. Additionally, a rapidly increasing number of freedom-seeking individuals are moving to Paraguay in search of better opportunities and the liberties that are becoming increasingly constrained in their home countries. Many of these newcomers are Bitcoin enthusiasts who will contribute to building infrastructure and providing education to local communities. Furthermore, Paraguay boasts a low tax environment, with a 10% tax on local income and 0% tax on foreign income, making it particularly beneficial for digital nomads and expats working for foreign companies.

2. Abundant, Cheap Electricity

Paraguay is blessed with abundant renewable energy. Thanks to the hydroelectric power generated by the Itaipú and Yacyretá dams, Paraguay produces far more electricity than it consumes, selling the surplus to its neighbors, Argentina and Brazil. This untapped energy could be a game-changer for Bitcoin mining. If Paraguay harnesses just a fraction of this energy to mine Bitcoin, it could build substantial reserves, similar to what El Salvador is doing. Alternatively, by opening the doors to international miners with clear, predictable electricity pricing, customs fees, and governmental policies for mining, Paraguay could become a global hub for Bitcoin mining. Stable, transparent policies would attract investment, enabling miners to pay for electricity in Bitcoin, benefiting the private sector, boosting the economy, and facilitating energy storage in the form of Bitcoin reserves. This approach would enhance the country’s long-term economic independence from global powers.

3. Strong Community Bonds

Paraguayans, like others in Latin America, are very community-oriented. Families and local communities are top priorities, and the “helping my neighbor” mentality is still strong. This can greatly help us create an organic network effect for Bitcoin adoption. Information spreads quickly in Paraguay, and we’ve seen how small, close-knit communities can drive grassroots movements—just look at Bitcoin Beach in El Salvador. This social cohesion gives us a unique opportunity to educate and spread Bitcoin adoption through word-of-mouth and community involvement.

4. Dealing with Multiple Currencies

Paraguay’s local currency, the Guaraní, is one of the oldest currencies in circulation in Latin America, but it has also faced turbulent inflationary periods. This has led many locals to seek alternative stores of value. Furthermore, many businesses operate in U.S. dollars, driven by significant international trade and the presence of tourists and expats who are accustomed to thinking in dollar prices. As a result, it is common to see prices displayed in dollars, particularly in cities like Asunción and Ciudad del Este.

5. Large Unbanked Population

Approximately 40% of Paraguayans are unbanked, relying on cash for their daily transactions. Many people also share bank accounts with family members. Bitcoin gives these individuals an opportunity to participate in the global financial system without needing a traditional bank account. With Paraguay’s rising internet and smartphone penetration, there is a growing foundation for this population to leapfrog straight into decentralized finance. With the right infrastructure in place—like Bitcoin ATMs, mobile wallets, and merchant acceptance—Bitcoin could give millions of unbanked Paraguayans access to financial services they’ve never had before.

6. Bitcoin and Tourism

Bitcoin could increase Paraguay’s attractiveness to tourists, especially as more freedom-seeking individuals look for destinations where they can live, invest, and spend in Bitcoin. While Paraguay’s tourism industry is still developing compared to its neighbors, it has the potential to position itself as a hub for Bitcoiners and digital nomads, much like El Salvador has done. The eco-tourism around Itaipú, combined with a Bitcoin-friendly environment, could draw in a new wave of tourists eager to visit a country that embraces Bitcoin.

7. Foreign Investment Through Bitcoin

Paraguay currently operates outside the Common Reporting Standard (CRS), making it an attractive option for investors seeking privacy and diversification beyond the constraints of the Western financial system. However, sending and receiving money through traditional financial institutions can be costly due to Paraguay’s limited connection to the Western financial system. Bitcoin and stablecoins like USDT are already being used by investors to move money in and out of the country more efficiently. With more Bitcoin adoption, Paraguay could position itself as a crypto-friendly hub for international investments, without relying on cumbersome and expensive banking infrastructure.

8. Economy Built on Small Businesses and the Informal Sector

Paraguay’s economy is heavily based on small family businesses and a large informal sector—about 64% of the workforce operates informally. These businesses are often burdened by high transaction fees from local card processing monopolies like BankCard, which charge as much as 5%. Bitcoin offers a solution here. By accepting Bitcoin, these small businesses could avoid exorbitant fees, conduct quicker transactions, and access a global market, all without the need for a formal banking system. It’s a win-win, especially for businesses that struggle with high operating costs and unreliable service from traditional payment processors.

9. Conservatism and Sovereignty

Paraguayans historically value conservatism and national sovereignty. While the country faces pressures from powerful nations, the desire for independence remains strong. This mindset aligns with Bitcoin’s ethos of financial sovereignty, offering a way for Paraguay to further reduce its reliance on global financial institutions. Bitcoin could empower Paraguayans to safeguard their wealth from inflation and outside control, reinforcing the country’s long-term independence.

10. A Young, Tech-Savvy Population

With a median age of 26.6 years, Paraguay has a young population that grew up in the digital age, making them more open to modern technologies like Bitcoin. Young Paraguayans are already embracing modern technologies, and with the right education and infrastructure, they could quickly become early adopters of Bitcoin. This demographic is the key to building a vibrant Bitcoin economy, as they are more adaptable to technological change and eager for financial independence.