Experts see mining prospects in Paraguay

Paraguay is becoming one of the largest Bitcoin mining hubs. Hashrate Index experts came to this conclusion.

Experts noted a number of factors that allow a small Latin American country to attract cryptocurrency miners. According to their assessment, Paraguay accounts for 1.16%–1.45% of the global Bitcoin hashrate.

The Itaipu hydroelectric dam, the second-largest in the world by capacity, was identified by analysts as the main driver of mining development in the country.

The utility company ANDE enables miners to access tariffs of around $26 per MWh.

Power prices in the country are lower than in the miner-friendly U.S. states, but lag behind, for example, neighbouring Argentina. However, in the latter, as in Brazil, import duties on equipment reach up to 80% of the cost. In Paraguay, the duty does not exceed 20%.

Experts also noted factors that hinder mining development in the country. Among them:

• hot and humid climate that adversely affects equipment operation;
• uncertainty surrounding industry regulation;
• difficulties accessing financing for the business.

Hashrate Index noted that in August 2022 the president of Paraguay vetoed approved by Parliament mining bill.

Lawmakers will be able to revisit the document a year after the president’s veto was imposed. Among the positives for the crypto industry, experts noted the potential reduction of electricity tariffs. At present, ANDE prefers to participate in profit-sharing with miners, which increases miners’ costs.

However, the proposed legislative act would raise the bureaucratic burden on cryptocurrency miners. The document envisages the introduction of licenses.

After the ban on mining in China, the United States rose to the lead in the hashrate share, at 35.4% as of August 2021.