By
Godfrey Benjamin
April 29th, 2024
Paraguay’s dilemma comes as Bitcoin miners brace up for an all-important Bitcoin halving event 2024.
Paraguay may be making a U-turn from the Bitcoin mining blanket ban that its lawmakers floated last week. With some progress already made on the controversial proposed ban, officials are now looking to revisit the topic to ascertain that the decision is well thought out.
To this end, government officials have set a date for a public hearing on April 23 to hold a debate. At the hearing, they will consider the benefits and risks that Bitcoin mining poses to the country, to determine which outweighs the other, says Senator Lilian Samaniego during an April 10 senate session.
Paraguay Bitcoin Mining
Recall that on April 4, Paraguayan lawmakers introduced a draft law that would outrightly ban Bitcoin mining in the country, at least for the next 180 days. At the time, they claimed that illegal crypto miners were harming the country by stealing power. Those actions, they said, were taking a toll on the country’s electricity supply, necessitating immediate action.
About 4 days later, however, Senator Salyn Buzarquis also submitted a draft declaration of support for local and foreign investment infrastructure to the Senate. In the draft, he highlighted the economic advantages of selling Paraguay’s excess energy to licensed Bitcoin miners while encouraging the Ministry of Industry to study the same. Buzarquis also noted how the country’s 45 licensed Bitcoin miners have the capacity to generate $48 million for the National Electricity Administration (ANDE) by 2024. The Senator did not stop there. He projected that those figures could reach $125 million by 2025 after miners increase their mining capacity by installing more equipment.
Overall, Senator Buzarquis suggested that selling excess energy from its Itaipu hydropower plant to miners instead of exporting it to Brazil and Argentina has far-reaching effects not just for the energy sector alone, but for the country at large. Other than possibly saving ANDE from bankruptcy, the Senator noted that the move could potentially help Paraguay to generate $73 million annually and about $17 million in value-added tax for the treasury
On April 10, Buzarquis’ draft letter got approved by the Senate, and that may be the reason why lawmakers are halting the earlier ban in the interim.
Paraguay’s dilemma comes as Bitcoin miners brace up for an all-important Bitcoin halving event 2024. The April 20 event is expected to half miner rewards from 6.25 BTC ($442,000) to 3.125 BTC ($221,000).