The Paraguayan economy could lose more than $200 million annually if the country’s lawmakers pass a recently introduced bill to ban crypto mining in the country.
Lawmakers introduced the draft bill on April 4, claiming illegal cryptocurrency mines steal power and disrupt the country’s electricity supply. If passed, the ban would last 180 days or until new laws are enacted and the national power grid operator can ensure it can supply sufficient energy.
But a ban on lawful miners operating in the region could prove costly for the South American country, according to Hashlabs Mining co-founder and chief mining strategist Jaran Mellerud, who recently spoke with Cointelegraph:
Banning Bitcoin mining could cost Paraguay more than $200 million a year, assuming the country has 500 megawatts of legal miners paying $0.05 per kilowatt-hour in operating expenses.”
Markets of this size aren’t common in Paraguay either, which boasts a rather small population of 6.8 million people and the 94th-largest gross domestic product in the world at $41.7 billion, according to Worldometer, citing 2022 data.
Bitcoin (BTC) mining has provided a “significant, positive contribution to Paraguay’s trade balance” until this point, Mellerud argued.
Bitcoin mining firms currently need to register and receive authorization from the Paraguayan Ministry of Industry and Commerce.
If passed, the bill may impact one of the industry’s largest players, Marathon Digital Holdings, which started deploying 27 megawatts around the Itaipu hydroelectric power plant last November.
Source: BowTiedMara
The Itaipu Dam has become a popular site for miners to set up, as it supplies all of Paraguay’s local electricity needs and leaves a large amount of excess electricity to tap into.
This excess electricity has historically been exported to Brazil at low prices. However, Mellerud noted that a wave of Bitcoin miners has swooped in at slightly higher prices in recent months.
But lawmakers say there have been 50 cases of interrupted power supply linked to cryptocurrency miners illegally tapping into these electricity sources since February alone.
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