- Paraguay proposes a 180-day moratorium on cryptocurrency mining and related activities due to excessive electrical consumption and illegal operations.
- Analysts warn the ban could cost Paraguay over $200 million annually, jeopardizing the economic benefits derived from the legal mining industry.
Paraguay is one of the most popular and sought-after countries in the world when it comes to Bitcoin mining. However, the country is now getting stricter with the cryptocurrency industry.
Recently, a group of lawmakers in the country proposed a bill to temporarily halt cryptocurrency mining operations, citing their heavy consumption of electrical energy. Submitted to the National Congress, the bill suggests a 180-day moratorium on both the operation and installation of cryptocurrency mining farms, as well as other related activities. This suspension could be prolonged until legislation regulating such activities is established.
One of the prime reasons this bill has been proposed is because there are quite a few illegal bitcoin farms, per the lawmakers. Additionally, the bill argues that the temporary ban is necessary to protect consumers.
Paraguayan bitcoin analyst Joaquin Morinigo took the matter to X (formerly Twitter) and said (translated):
“Paraguayan senators want to ban an industry that generates millions of dollars for the Paraguayan government and represents a unique opportunity to obtain energy sovereignty.”
However, there’s also a downside to this. According to Hashlabs Mining co-founder and chief mining strategist Jaran Mellerud, Banning legal miners from operating in the region could cost Paraguay more than $200 million a year, assuming the country has 500 megawatts of legal miners paying $0.05 per kilowatt-hour in operating expenses.
Paraguay has almost 100% hydroelectric generation capacity, operating two big binational hydroelectric dams with Brazil (Itaipu) and Argentina (Yacyreta). This abundance of green energy is attractive to Bitcoin miners for its low-cost electricity and appeals to investors increasingly focused on renewable energy sources.
Edited by Harshajit Sarmah
