Paraguay considers temporary ban on cryptocurrency mining due to illegal ‘farms’ overwhelming power supply

Lawmakers in Paraguay have proposed a bill that would temporarily ban cryptocurrency mining and related activities in the country. The bill aims to address the issue of illegal crypto mines, which are reportedly stealing power and causing disruptions to the electricity supply. The proposed law would prohibit the installation of crypto mining farms and the creation, storage, and commercialization of cryptocurrencies. It also seeks to regulate crypto staking and wallets. The ban would last for 180 days or until a comprehensive law is enacted, and the National Electricity Administration (ANDE) can ensure a stable energy supply for crypto miners without affecting other users of the electrical system. The draft law highlights the significant increase in crypto miners in Paraguay, particularly in the Alto Paraná region, which is known for its abundant hydroelectric energy. The region has experienced numerous cases of power interruptions caused by illegal hookups to the grid by crypto miners. ANDE estimates that each crypto mining farm causes damages and losses of up to $94,900, with yearly losses in the Alto Paraná region potentially reaching $60 million. The draft argues that implementing crypto regulations would enable better supervision of the industry and address concerns related to consumer protection, money laundering, and tax evasion. In 2022, Paraguay came close to passing a tax and legal framework for the crypto sector, but it was vetoed due to concerns about the high energy consumption associated with mining.