A group of lawmakers in Paraguay have raised concerns over the impact of Bitcoin mining on the nation’s power supply. They have introduced a bill to temporarily ban the creation, storage, and mining of cryptocurrencies in Paraguay. The lawmakers argue that crypto miners are taking advantage of the country’s low power tariffs, leading to electricity theft and significant losses for the National Electricity Administration (ANDE). The bill proposes a 180-day ban on crypto mining until a proper regulatory framework is established to ensure that the energy needs of miners can be met without risking the stability of the grid.
The government of Paraguay has been working to regulate crypto mining and combat illegal operations in the country. In July 2022, the Senate of Paraguay approved a bill aimed at regulating crypto mining, exchange, and custody, but it was vetoed by the president in August 2022. The recent bill introduced by the fourteen senators aims to address the growing concerns over the impact of crypto mining on the nation’s power infrastructure. The ban is proposed as a temporary measure to restrict the activity until a regulatory framework is in place to ensure the sustainable energy consumption by crypto miners.
The ban on crypto mining in Paraguay is also linked to cases of electricity theft related to Bitcoin mining operations. The Alto Paraná region alone has reported nearly 50 cases of electricity theft connected to crypto mining, resulting in significant losses for ANDE. The senators estimate that each clandestine cryptocurrency farm causes damage of 500 to 700 million guaraníes per month, with over 50 illegal mining premises discovered by February 2024. The total losses to the state company from these operations could reach up to 420,000 million guaraníes in one year, or around 60 million dollars, highlighting the economic impact of illegal crypto mining on the country.
The temporary ban on crypto mining in Paraguay is seen as a necessary measure to address the issues surrounding energy consumption and electricity theft associated with Bitcoin mining operations. The ban will be in place until a regulatory framework is established to ensure sustainable energy consumption by miners without compromising the stability of the grid. The government is taking steps to combat illegal mining operations and regulate the crypto industry to protect the nation’s power supply and infrastructure from the negative impact of excessive energy consumption by miners.
The proposed ban on crypto mining in Paraguay has sparked discussions among lawmakers, industry experts, and the public about the regulation of cryptocurrencies and their impact on energy consumption. The country’s abundant hydroelectric energy has attracted crypto miners, but concerns over electricity theft and grid stability have prompted government intervention. The temporary ban is seen as a proactive step to address the growing challenges posed by the rapid growth of the crypto mining industry in Paraguay and ensure that energy resources are used responsibly and sustainably.
In conclusion, the decision to temporarily ban crypto mining in Paraguay reflects the government’s efforts to regulate the industry and address the issues related to energy consumption and electricity theft. The proposed ban is aimed at protecting the nation’s power supply and infrastructure from the negative impact of excessive energy consumption by crypto miners. While the ban may have economic implications for the crypto industry, it is seen as a necessary measure to establish a regulatory framework that promotes sustainable energy consumption and prevents electricity theft associated with crypto mining operations. Through collaboration with stakeholders, Paraguay aims to create a balanced regulatory environment that supports the growth of the crypto industry while ensuring the effective management of energy resources for the benefit of the country.
