A cohort of legislators in Paraguay has proposed a temporary prohibition on Bitcoin mining, citing disruptions to the country’s power supply. On April 4, fourteen senators in Paraguay introduced a bill advocating for the temporary cessation of cryptocurrency creation, storage, and the establishment of crypto mining farms within the nation’s borders.
The lawmakers contended that crypto miners exploit the country’s relatively low power tariffs. They highlighted the significant surge in crypto mining activity in Paraguay in recent years, attributing it to the country’s ample hydroelectric energy resources.
Paraguay’s government has been gearing up to combat illicit Bitcoin mining operations. In July 2022, the Paraguayan Senate passed a bill aimed at regulating crypto mining, exchanges, and custody. However, the president of Paraguay vetoed the bill in August 2022.
The bill stipulates that the ban would remain in effect for 180 days or until a comprehensive regulatory framework is put in place.
“This proposal is presented as a reasonable measure to temporarily limit the activity until there exists legislation to govern it.”
Moreover, the ban would persist until ANDE (Paraguay’s National Electricity Administration) can ensure adequate infrastructure to accommodate the energy demands of crypto mining without jeopardizing the stability of the rest of the grid.
Electricity Thefts Linked to Crypto Miners in Paraguay
Until February, the Alto Paraná region of Paraguay alone reported nearly 50 instances of electricity theft associated with Bitcoin mining. According to the senators, this has resulted in substantial losses for ANDE.
ANDE estimated that each clandestine “cryptocurrency farm” causes damages ranging from 500 to 700 million guaraníes per month. The bill indicated that over 50 such illegal crypto facilities had been uncovered by February 2024.
“In the span of one year, these operations could inflict property damages on this state-owned company ranging from 300,000 to 420,000 million guaraníes, approximately 60 million dollars.”
