Paraguay Rethinks Sweeping Bitcoin Mining Prohibition

Paraguay is reconsidering the Bitcoin mining ban that the country's legislators introduced just last week. With some progress already made on the controversial ban, officials are now revisiting the topic to ensure a well-thought-out decision. To achieve this, government officials have set a date for a public hearing on April 23 to host a debate on the matter. During the hearing, they will consider the benefits and risks Bitcoin mining poses to the country to determine which outweighs the other, Senator Lilian Samaniego said during a senate session on April 10.

Paraguay Reconsiders Sweeping Bitcoin Mining Ban

Asunción, Paraguay – Paraguay is reportedly reconsidering a sweeping ban on Bitcoin mining that was introduced by the country's lawmakers just last week. With progress on the controversial bill seemingly grinding to a halt, officials are now looking to revisit the topic to ensure that a well-rounded decision is made.

To that end, government officials have scheduled a public hearing for April 23 to facilitate a discussion on the matter. "In this hearing, we will analyze the benefits and risks that Bitcoin mining brings to the country, to determine which outweighs the other," Senator Lilian Samaniego said during a senate session on April 10.

Bitcoin Mining in Paraguay

On April 4, Paraguayan lawmakers introduced a draft bill that would effectively ban Bitcoin mining in the country, at least for the next 180 days. At the time, they alleged that illicit crypto miners were harming the nation by stealing electricity.

"They are causing damage to the national electrical system, so we must act immediately," they stated.

However, roughly four days later, Senator Salyn Buzarquis also presented a draft bill to the senate that advocated for supporting national and foreign investment in infrastructure.

In the draft, he highlighted the economic benefits of selling Paraguay's excess energy to licensed Bitcoin miners and encouraged the Ministry of Industry to research the same.

Buzarquis also noted that the country's 45 licensed Bitcoin miners have the potential to generate $48 million for the National Electricity Administration (ANDE) by 2024.

The senator didn't stop there, projecting that the figure could reach $125 million by 2025 as miners increase their hashrate by installing more equipment.

Overall, Senator Buzarquis suggested that selling excess energy from the Itaipu hydroelectric dam to miners, rather than exporting it to Brazil and Argentina, would have far-reaching positive implications not only for the energy sector but for the country as a whole.

In addition to potentially saving ANDE from bankruptcy, the senator noted that the move could generate an annual $73 million for Paraguay and roughly $17 million in value-added tax for the treasury.

On April 10, Buzarquis' draft bill was approved by the senate, and it is likely the reason why lawmakers have paused the aforementioned ban, albeit temporarily.

Paraguay's dilemma comes as Bitcoin miners prepare for the highly anticipated Bitcoin halving event of 2024. Scheduled for May 2024, the event is expected to slash the block reward for miners from 6.25 BTC ($442,000) to 3.125 BTC ($221,000).

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