Cryptocurrency miners in Paraguay have been affected by the large rise in electricity charges imposed by the federal government. According to a research from Nano Grijalba, a developer at Braiins Mining, after the veto of the crypto regulation, the new power prices make mining unprofitable in the country.
Increase in Mining Power Rates Good for Paraguayan Companies
Paraguay has been known as a safe haven for mining Bitcoin and other digital currencies. However, this is no longer the case as the government has taken action. The federal government is using crypto mining to raise revenue, and miners are expressing their concerns. According to the research from Braiins Mining developer Nano Grijalba, the sudden increase of more than 50% in charges is seen as a form of discrimination against miners.
Grijalba also criticised the environmental logic of the measure. He noted on Twitter:
It is possible to increase rates for Bitcoin mining in Paraguay. This is a clear trade-off. However, it is difficult to attract high-emission industries with lower rates. We should prioritize support for specific industries to ensure a sustainable future.
Hosting Activity Affected
Grijalba also expressed his concerns about the future of hosting activities within the country, which includes providing companies with the storage of mining records for third-party events. He notes that it is impossible to supply the service due to the high prices and margins on the international market.
A framework was authorized by the Paraguayan Congress to regulate cryptocurrency mining and trading within the country, including caps on electricity costs for mining. Last July, however, this regulation was vetoed by the current president of Paraguay, Mario Abdo Benítez, who stated that the industry was characterized by its “high consumption of electricity, with intensive use of capital and little use of labor.”
Abdo Benítez also mentioned that the growth of crypto mining could lead the nation to import electricity in the future. The president attempted to pass the cryptocurrency bill without his support, but it lacked votes and was eventually put on hold in December.
Grijalba reports that miners are working closely with authorities to introduce legislation that can reduce the miner’s burden. He stated on Twitter:
To make it more attractive, we are currently working on a new decree. We hope that it addresses import taxes, another weak area.
However, no further details were provided about this new decree. Finally, Grijalba noted that these measures should be normalized in the country for the positive effects on the overall economy.
What do you think about the current state of Bitcoin mining in Paraguay? Let us know your thoughts in the comments section below.
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