Paraguayan senators have paused the advancement of a proposed cryptocurrency mining ban introduced last week. Instead, officials are now exploring the possibility of leveraging excess energy from the Itaipu hydroelectric plant by selling it to miners, rather than exporting it to neighboring Brazil and Argentina.
Senator Lilian Samaniego confirmed during a Senate session on April 10 that a public hearing is scheduled for April 23 to deliberate on the merits and drawbacks of Bitcoin mining in the nation. This decision follows the presentation of a draft law proposing a temporary ban on Bitcoin mining for 180 days, amid concerns of illicit cryptocurrency mining operations siphoning electricity and disrupting the country's power supply.
However, just days later, Paraguayan lawmakers endorsed a declaration on April 8 in support of both local and foreign investment in infrastructure. Senator Salyn Buzarquis hopes this declaration will prompt the Paraguayan Ministry of Industry to explore the possibility of selling surplus energy to Bitcoin miners, citing potential economic benefits.
According to Buzarquis, there are forecasts suggesting that 45 licensed cryptocurrency miners could generate significant revenue for the National Electricity Administration (ANDE) by 2024, potentially reaching $48 million, and escalating to $125 million by 2025 as miners expand their operations.
Buzarquis further highlights the potential financial lifeline this could offer ANDE, projecting substantial annual revenue and Treasury VAT gains. By selling surplus energy to local Bitcoin miners at a favorable rate, Buzarquis estimates that ANDE could potentially stave off bankruptcy and redirect funds towards infrastructure investments, thus avoiding the need for rate hikes for Paraguayan citizens.
This proposal also touches on the existing arrangement where Paraguay sells energy to Brazil at a subsidized rate. The debate over cryptocurrency mining regulations in Paraguay gains significance as Bitcoin miners brace for the imminent Bitcoin halving event on April 20, which will halve miner rewards and potentially reshape the dynamics of the industry.
