Paraguayan Senate Halts Bitcoin Mining Ban Proposal

The Paraguayan Senate has paused the consideration of a bill proposing a moratorium on cryptocurrency mining, focusing instead on the financial implications. This was reported by Cointelegraph.

On April 3, a group of senators introduced a document that proposed a 180-day ban on cryptocurrency mining and the establishment of new bitcoin farms in the country. The period was suggested to be extended in the absence of comprehensive industry regulation and guarantees from the National Electricity Administration (ANDE) for uninterrupted power supply to the population.

Politicians cited electricity theft by illegal miners and the disruptions they cause to networks. Referring to ANDE, they claimed a potential annual loss of up to $60 million. Despite all complaints being directed at unregistered cryptocurrency miners, the senators proposed a total ban.

According to Hashlabs Mining co-founder Jaran Mellerud, the adoption of the bill would result in over $200 million in lost revenue for the country annually.

On April 8, another group of legislators presented a declaration on the economic benefits of supporting miners, whose investments could bolster the energy infrastructure.

Today We approved a Declaration WHEREBY THE SENATE OF #PARAGUAY SUPPORTS LOCAL AND FOREIGN INVESTMENTS IN INFRASTRUCTURE AND URGES THE MINISTRY OF INDUSTRY TO STUDY THE ECONOMIC ADVANTAGES OF SELLING OUR SURPLUS ENERGY TO THE #CryptoMining INDUSTRY. #BITCOIN pic.twitter.com/1sxptd5c8E

— Salyn Buzarquis (@SalynBuzarquis) April 10, 2024

According to the document, in 2024, 45 registered industry enterprises could generate $48 million in revenue for ANDE. This figure is expected to rise to $125 million by 2025.

The cost of electricity production is approximately $22 per MW, and by selling to miners at $40, the agency could achieve a 45% net profit. Currently, the operator is forced to sell excess generation to Brazil at a loss, at a price of $10 per MW for a daily volume of 2000 MW.

The authors of the declaration believe that the development of mining in the country will ensure financial inflows that can be directed towards the development of the energy system. 

“This stream of funds will save ANDE from bankruptcy, provide an opportunity to invest in infrastructure, and avoid raising tariffs for Paraguayans,” the senators emphasized.

Following the review of the document in the Senate session, lawmakers have scheduled public debates for April 23 to discuss the pros and cons of mining.

Back in November 2023, American company Marathon Digital, the holder of the largest hash rate among public companies, began bitcoin mining in the country.