Paraguay risks a yearly revenue decline of 200M dollars with its plan to ban Bitcoin mining

Crypto News– If Paraguay’s lawmakers approve a newly introduced bill to outlaw cryptocurrency mining, the country’s economy could suffer losses exceeding $200 million annually. The draft bill, presented on April 4, alleges that illegal cryptocurrency mining operations are consuming power unlawfully and causing disruptions to Paraguay’s electricity supply.

Paraguay risks a yearly revenue decline of 200M dollars with its plan to ban Bitcoin mining

Should the ban be enacted, it would be effective for 180 days or until new regulations are established and the national power grid operator can guarantee an adequate energy supply. Paraguay, with its relatively small population of 6.8 million people and a GDP ranked 94th globally at $41.7 billion as of 2022, doesn’t frequently encounter markets of this scale.

Bitcoin mining has notably contributed positively to Paraguay’s trade balance thus far, as argued by proponents. Currently, Bitcoin mining firms are required to register and obtain authorization from the Paraguayan Ministry of Industry and Commerce.

The passage of this bill could have implications for major industry players like Marathon Digital Holdings, which commenced deploying 27 megawatts around the Itaipu hydroelectric power plant as of last November.

Proposed Bitcoin mining prohibition in Paraguay may lead to an estimated yearly loss of 200M Dollars

Excess electricity in Paraguay has traditionally been exported to Brazil at relatively low prices. However, Mellerud pointed out that in recent months, a surge of Bitcoin miners has appeared willing to pay slightly higher prices for this energy.

Nevertheless, lawmakers contend that there have been 50 instances of power supply disruptions directly linked to cryptocurrency miners illicitly tapping into these electricity sources since February alone.

According to the country’s National Electricity Administration, each cryptocurrency mining operation has resulted in damages and losses estimated to be as high as $94,900. Moreover, it’s estimated that total annual losses in the Alto Paraná area, where the Itaipu power plant is located, could reach up to $60 million.