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A group of lawmakers in Paraguay has called for a temporary ban on Bitcoin mining, citing disruptions to the nation’s power supply.
In a bill introduced on April 4, fourteen Paraguayan senators proposed a temporary prohibition on the creation and storage of cryptocurrencies, as well as a ban on crypto mining farms within the country’s territory.
The lawmakers argued that crypto miners “take advantage” of the nation’s relatively low power tariffs. Crypto mining in Paraguay has experienced significant growth in recent years, driven by the country’s abundant hydroelectric energy, they noted.
The Paraguayan government has been preparing to aggressively target illegal Bitcoin mining operations. In July 2022, the Senate approved a bill aimed at regulating crypto mining, exchanges, and custody. However, the President of Paraguay vetoed this bill in August 2022.
The new bill specifies that the ban would last for 180 days or until a proper regulatory framework is established.
“This project is proposed as reasonable to temporarily restrict the activity until there is a law that regulates it.”
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Furthermore, the ban would remain in place until ANDE (Paraguay’s National Electricity Administration) can guarantee sufficient infrastructure to support the energy needs of crypto mining without risking the rest of the grid.
Source: Republic of Paraguay Congress
Electricity Thefts Linked to Crypto Miners in Paraguay
Until February, Paraguay’s Alto Paraná region alone recorded nearly 50 cases of electrical energy theft linked to Bitcoin mining. This has generated significant losses for ANDE, according to the senators.
ANDE estimated that the damage caused by each clandestine “cryptocurrency farm” ranges between 500 million and 700 million guaraníes per month. Over 50 such illegal crypto premises had been discovered by February 2024, the bill stated.
“In one year they could produce patrimonial damages to this State company of between 300,000 and 420,000 million guaraníes in one year, or around 60 million dollars.”
