A group of lawmakers in Paraguay have introduced a bill calling for a temporary ban on Bitcoin mining in the country, citing disruptions to the nation’s power supply. The bill, introduced on April 4, proposes a ban on the creation and storage of cryptocurrencies, as well as on crypto mining farms within Paraguay. Lawmakers argue that crypto miners take advantage of the country’s low power tariffs and have noted a significant increase in crypto mining activity in recent years, fueled by Paraguay’s abundant hydroelectric energy resources.
The Paraguayan government has been taking steps to crackdown on illegal bitcoin mining operations, with the Senate approving a bill in July 2022 to regulate crypto mining, exchanges, and custody. However, the bill was vetoed by the president in August 2022. The proposed ban on crypto mining would last for 180 days or until a proper regulatory framework is established to govern the industry. The lawmakers believe that the temporary restriction is necessary to ensure that crypto mining operations do not strain the nation’s power grid and infrastructure.
In the Alto Paraná region of Paraguay, there have been nearly 50 cases of electricity theft linked to bitcoin mining, resulting in significant losses for the National Electricity Administration (ANDE). Each clandestine crypto mining operation is estimated to cause between 500 and 700 million guaraníes in damage per month. The bill highlights that over 50 illegal crypto premises have been discovered in the region until February 2024, posing a threat to the stability of the nation’s power supply and economy.
The proposed ban on Bitcoin mining in Paraguay aims to protect the nation’s power supply and prevent further losses from electricity theft and illegal crypto mining operations. The senators behind the bill argue that until ANDE can ensure sufficient infrastructure to support crypto mining’s energy needs without risking disruptions to the grid, a temporary ban is necessary. The bill emphasizes the need for a regulatory framework to govern the crypto mining industry and ensure compliance with existing laws and regulations.
The lawmakers in Paraguay are also concerned about the potential financial impact of rampant electricity theft and illegal crypto mining operations in the country. They estimate that these activities could result in losses of hundreds of millions of guaraníes for ANDE and the state company. The proposed ban on crypto mining seeks to mitigate these financial losses and protect the nation’s economy from the detrimental effects of illegal activities in the crypto sector.
In conclusion, the bill introduced by Paraguayan lawmakers to ban Bitcoin mining reflects the government’s commitment to regulating the crypto industry and protecting the nation’s power supply and economy. The proposed ban is seen as a temporary measure to address the challenges posed by illegal crypto mining operations and ensure that adequate infrastructure is in place to support legitimate crypto mining activities. It remains to be seen how this proposed ban will be implemented and whether it will lead to the development of a comprehensive regulatory framework for the crypto industry in Paraguay.
