Key Takeaways:
- Paraguay’s legislators are reconsidering a proposed blanket ban on cryptocurrency mining, now exploring the option of using surplus energy from the Itaipu hydropower plant for mining operations, amidst concerns over illegal mining activities.
- A legislative session on April 10 highlighted a shift towards inviting public and legislative discussion on April 23 about the benefits and drawbacks of Bitcoin mining in the country, following initial plans for a temporary mining ban.
- Senator Salyn Buzarquis emphasized the potential financial benefits for the National Electricity Administration and the state from authorized cryptocurrency mining operations, including significant revenue, avoidance of ANDE’s bankruptcy, and increased employment, while also acknowledging ongoing issues with illegal mining.
Paraguay’s legislators have paused the advancement of a blanket ban on cryptocurrency mining, opening up discussions on an alternative that could see the country selling surplus energy from the Itaipu hydropower plant to mining operations.
This pivot comes in response to concerns over illegal mining activities that have reportedly disrupted the nation’s power supply.
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
In a significant legislative session on April 10, it was announced that a public hearing scheduled for April 23 would delve into the pros and cons of allowing Bitcoin mining to flourish within the nation.
This development follows the introduction of a draft bill on April 4 aimed at imposing a temporary 180-day prohibition on Bitcoin mining, spurred by reports of unauthorized mining exacerbating electricity supply issues.
Paraguay 🇵🇾 does a 180 on #Bitcoin mining:
— BowTiedMara (@BowTiedMara) April 10, 2024
✅ Anti-mining & anti-crypto law treatment is postponed for 30 days
✅ Senators propose selling the country’s energy surplus to miners instead of giving it to Brazil 🇧🇷 and Argentina 🇦🇷pic.twitter.com/cVAwTgog96 https://t.co/GoLZyyGjzs
Despite the proposed ban, Paraguayan lawmakers shifted gears on April 8, endorsing a declaration to foster both local and international investment in infrastructure.
This move signals a potential change in strategy, encouraging the Paraguayan Ministry of Industry to explore the economic benefits of channeling excess energy toward Bitcoin mining ventures.
BREAKING🚨: Paraguay 🇵🇾 is considering selling hydropower to #Bitcoin miners. pic.twitter.com/ZUHHbjfqnL
— Ryuushi (@_electronicCash) April 11, 2024
Senator Salyn Buzarquis, during a Senate address, highlighted the financial implications of such a shift.
He pointed out that the 45 licensed cryptocurrency mining operations in the country are projected to generate significant revenue for the National Electricity Administration (ANDE) by 2024, with expectations of further growth by 2025 as mining capabilities expand.
Selling excess energy to miners at competitive rates could net ANDE a handsome profit margin, alongside substantial value-added tax revenue for the state treasury.
Paraguay reconsiders bitcoin mining ban and favours selling excess electricity to them instead pic.twitter.com/jkCRxDyvmf
— CryptoSavingExpert ® (@CryptoSavingExp) April 11, 2024
This financial influx is seen as a critical lifeline for ANDE, potentially averting bankruptcy and enabling further infrastructure investment without burdening Paraguayans with higher rates.
Moreover, the proposed reallocation of energy resources could bolster employment in the local economy, adding another layer of benefits to the argument against the mining ban.
However, concerns persist about illegal mining activities, with lawmakers citing numerous instances where unauthorized taps into the power grid have led to supply disruptions.
Paraguay debates Bitcoin ($BTC) mining ban with a public hearing set for April 23, weighing potential nationwide benefits and risks 🏛️
— Block Insider (@BlockInsider_) April 11, 2024
Read More👇https://t.co/pJJOXUqclX
This backdrop of contention sets the stage for the upcoming public hearing, which could influence the future of cryptocurrency mining and energy policy in Paraguay.
As the debate unfolds, the global crypto mining community watches closely, especially with the impending Bitcoin halving event, which will reduce mining rewards and potentially impact the profitability and operational dynamics of mining activities worldwide.
About The Author
Victor Fawole, a seasoned Web3 content creator and social media influencer, excels in bringing the pulse of the crypto world to our readers.
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