Paraguay Lawmakers To Debate On Bitcoin Mining Reconsideration

Paraguay lawmakers, who proposed a Bitcoin mining ban last week, are reconsidering the proposal and are set to debate the topic later this month.

Paraguay lawmakers have proposed an alternative to the Bitcoin mining ban, all set to organize a public hearing to discuss the benefits and drawbacks of Bitcoin mining in the country. According to the lawmakers, cryptocurrency mining is an energy-consuming process, stealing power and disrupting the country’s electricity supply.

The Debate On Bitcoin Mining 

It all started on April 4 when the government of Paraguay prepared a draft for a temporary ban on Bitcoin mining for at least 180 days. The reason behind the same is over energy consumption and disruption of the country’s electricity supply.   

In a Senate session on April 10, Senator Lilian Samaniego proposed a new plan for Bitcoin mining reconsideration. The debate is slated for April 23 and includes a public hearing on the advantages and disadvantages of cryptocurrency mining in the country.

The senators emphasized the benefits of selling energy from the Itaipu hydropower plant to Brazil and Argentina. Paraguayan senators find it well to use excessive energy for miners’ benefits instead of exporting.

The decision came after lawmakers introduced a draft for temporary Bitcoin mining, claiming illegal cryptocurrency mines. However, four days later, the lawmakers came in support of the local and foreign investment infrastructure.

Senator Salyn Buzarquis favors pushing the Paraguayan Ministry of Industry to examine the economic and environmental benefits of selling excess energy to Bitcoin miners. He declared the same on X.

Today We approved a Declaration WHEREBY THE SENATE OF #PARAGUAY SUPPORTS LOCAL AND FOREIGN INVESTMENTS IN INFRASTRUCTURE AND URGES THE MINISTRY OF INDUSTRY TO STUDY THE ECONOMIC ADVANTAGES OF SELLING OUR SURPLUS ENERGY TO THE #CryptoMining INDUSTRY. #BITCOIN pic.twitter.com/1sxptd5c8E

— Salyn Buzarquis (@SalynBuzarquis) April 10, 2024

Additionally, In an April 8 letter to Congress, Buzarquis observed that approximately 45 licensed cryptocurrency miners generate over $48 million for the National Electricity Administration (ANDE) by 2024 and is supposed to hit $125 million by 2025.     

According to the ANDE, the crypto-mining firm lost around $94,900 (700 million Paraguayan guaraníes). Furthermore, the cost at which electricity is produced in Itaipu’s hydropower plant could help ANDE generate around 45% net profit by energy selling to the local Bitcoin miners.

The electricity is produced at the rate of $22 per megawatt-hour (MWh) range and could be sold at the rate of $40/MWh to the local miners. The schedule can help the country generate $73 Million annually and over $17 Million in value-added tax for the treasury.

Bitcoin Halving 

Despite the controversies and debates, the Bitcoin miners are preparing for the upcoming Bitcoin halving event, which is expected to take place on April 20.

Bitcoin halving is an event where the rewards for miners are cut to half and reduces the rate at which the Bitcoins are issued. For the upcoming event, the miner rewards will be dropped from 6.25 BTC ($442,000) to 3.125 BTC ($221,000).

Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.