May 19, 2024
Paraguay Reconsiders Bitcoin Mining Ban
Latest Cryptocurrency News

Paraguay Reconsiders Bitcoin Mining Ban

Paraguayan senators have halted progress on a proposed cryptocurrency mining ban, opting to explore the potential advantages of selling excess energy to miners instead of exporting it.

In an April 10 Senate session, Senator Lilian Samaniego confirmed that a debate would be held on April 23 to weigh the benefits and drawbacks of Bitcoin mining in the country.

Debate on Cryptocurrency Mining Ban and Energy Utilization

The decision to reassess the proposed ban comes after lawmakers introduced a draft law on April 4 aimed at temporarily prohibiting Bitcoin mining for 180 days. The rationale behind the ban was to address concerns about illegal cryptocurrency mines siphoning power and disrupting the nation’s electricity supply.

However, Paraguayan lawmakers later approved a declaration on April 8 to support local and foreign investment infrastructure, signaling a shift in perspective. Senator Salyn Buzarquis expressed hope that this declaration would prompt the Paraguayan Ministry of Industry to explore the economic benefits of redirecting excess energy to Bitcoin miners.

Senator Salyn Buzarquis speaking to Paraguay’s senate on April 10. Source: YouTube

In a letter to Congress, Buzarquis highlighted the potential financial gains, noting that 45 licensed cryptocurrency miners could generate $48 million for the National Electricity Administration (ANDE) by 2024, expected to rise to $125 million by 2025 with further equipment installations.

Economic Implications and Employment Opportunities

Buzarquis emphasized the significant profit margins achievable by selling excess energy to Bitcoin miners at $40 per megawatt-hour (MWh), which could result in annual revenues of $73 million for ANDE, along with substantial value-added tax contributions to the treasury.

Furthermore, the potential expansion of cryptocurrency mining operations in Paraguay could create additional employment opportunities, contributing to the local economy.

Impact of Proposed Ban on Industry Players

The proposed ban could have far-reaching consequences for industry players like Marathon Digital Holdings, which established a presence in Paraguay last November, deploying 27 MW around the Itaipu hydroelectric power plant.

The controversy surrounding cryptocurrency mining in Paraguay coincides with the upcoming Bitcoin halving event scheduled for April 20. This event will reduce miner rewards from 6.25 BTC ($442,000) to 3.125 BTC ($221,000), adding further complexity to the ongoing debate.

Image by Pete Linforth from Pixabay

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