Paraguay Seeks to Review Blanket Ban on Bitcoin Mining

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Officials in Paraguay are considering reversing their decision to ban Bitcoin mining after initially proposing such a measure last week. The proposed ban had gained some traction, but now there are plans to reevaluate the situation and ensure a carefully considered decision is made.

Government officials have announced that a public hearing on Bitcoin mining will take place on April 23. During this event, they will assess the pros and cons of Bitcoin mining for our country to decide which is more significant. Senator Lilian Samaniego made this announcement at the Senate session on April 10.

Paraguay Bitcoin Mining

Recall that on April 4, Paraguayan lawmakers introduced a draft law that would outrightly ban Bitcoin mining in the country, at least for the next 180 days. At the time, they claimed that illegal crypto miners were harming the country by stealing power. Those actions, they said, were taking a toll on the country’s electricity supply, necessitating immediate action.

Approximately four days after the initial declaration, Senator Salyn Buzarquis presented a draft statement to the Senate advocating for local and foreign investment in infrastructure. He emphasized the economic benefits of allowing Paraguay’s excess energy to be sold to licensed Bitcoin miners. Furthermore, he urged the Ministry of Industry to conduct research on this topic. The senator mentioned that the 45 legally authorized Bitcoin miners could generate around $48 million for the National Electricity Administration (ANDE) by 2024. He predicted that these numbers could escalate to $125 million by 2025 if miners expanded their operations by adding more equipment.

Overall, Senator Buzarquis suggested that selling excess energy from its Itaipu hydropower plant to miners instead of exporting it to Brazil and Argentina has far-reaching effects not just for the energy sector alone, but for the country at large. Other than possibly saving ANDE from bankruptcy, the Senator noted that the move could potentially help Paraguay to generate $73 million annually and about $17 million in value-added tax for the treasury

On April 10, the Senate endorsed a draft letter from Buzarquis. This could explain why lawmakers have temporarily suspended the previous ban.

Paraguay faces a challenging situation as Bitcoin miners prepare for the upcoming halving of rewards in April 2024. This significant event is projected to decrease miner compensation from 6.25 Bitcoins ($442,000) to 3.125 Bitcoins ($221,000).

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2024-04-11 11:45