LATAM's New Crypto Mining ‘Promised Land': Pluses & Minuses for Paraguay
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Loading... - james benjamin
- 13 Sep 2022
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Paraguay has become a “new Latin American Mecca for cryptocurrency mining,” a new report has claimed – but not everyone seems to be happy about the fact that more miners than ever are choosing to set up shop in the nation.
As previously reported, the Paraguayan Senate last month signed off on a bill that will regulate crypto mining and trading in the nation. The bill, which has been in the pipelines since September 2021, seeks to legalize mining and ensure that miners pay taxes and declare their activities.
Many Paraguayan politicians have argued that the mining sector could be a major money-spinner for the government and power companies. The nation is home to a number of large hydroelectric power stations that periodically produce surplus power.
As this surplus power often cannot be used by Paraguayans, many advocates have called for international miners to be encouraged to set up shop near dams and power plants. While other industries have little use for irregular power supply, this is not the case for miners, whose rigs can take advantage of power when it is available and sit idle when this is not the case. Miners from as far afield as Canada and China have already been courted, with talks still ongoing with some of the parties fleeing China’s crypto crackdown of September 2021.
El Pais reported that an abundance of “very cheap electricity” has turned the nation into a “promised land for profitable Bitcoin mining,” and remarked that former “jungles” in Ciudad del Este, San Pedro, and Paraguarí have already become major mining centers.
This is also the case in “rural towns” with high populations of ethnic Germans, such as Villarrica.
The bill, which must now be approved or vetoed by President Mario Abdo Benítez, will seal the fate of the nation’s crypto mining sector.
But Luis Benítez, a university professor and long-time home crypto miner, claimed that only industrial miners stand to benefit – and that “amateur and domestic” miners stand to gain nothing from it. Benítez claimed that politicians had “only met with large mining firms” before formulating the bill, and had created legislation “very hastily, without taking into account issues pertaining to energy and tax policy.”
In fact, power companies have also expressed their concerns. A national energy provider has previously asked the government to oblige miners to pay in advance for electrical power – and to settle their bills in USD. Read More…
