Proposed Cryptocurrency Mining Ban in Paraguay Could Cost Economy Significantly
Paraguay faces a potential economic hit of over $200 million annually if a proposed bill to ban cryptocurrency mining is passed by lawmakers.
Introduced on April 4, the bill aims to curb illegal mining operations, which lawmakers claim are draining power and disrupting the country’s electricity supply. The ban, if enacted, would last 180 days or until new regulations are implemented and the national power grid operator can ensure sufficient energy supply.
Despite the proposed ban, lawful mining operations have contributed significantly to Paraguay’s economy, according to Jaran Mellerud, co-founder of Hashlabs Mining. With Bitcoin mining operations currently needing registration and authorization from the Paraguayan Ministry of Industry and Commerce, major players like Marathon Digital Holdings could be affected.
Mining activities near the Itaipu hydroelectric power plant, favored for its surplus electricity historically exported to Brazil, have drawn attention. However, concerns have arisen over potential power disruptions and financial losses associated with increased mining activity.
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The National Electricity Administration estimates damages and losses of up to $94,900 per cryptocurrency mining operation, with total annual losses in the Alto Paraná area potentially reaching $60 million.
Similar issues have been seen in Kazakhstan, leading to government crackdowns on the industry and the expulsion of illegal mining operators. Paraguay and Argentina may see an influx of US-based miners seeking favorable regulatory environments and lower electricity costs.
These developments coincide with preparations for the upcoming Bitcoin halving event on April 20, expected to reduce miner rewards from 6.25 Bitcoin to 3.125 Bitcoin.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
