Paraguayan senators have put a stop to the proposed ban on cryptocurrency mining that was introduced last week. Instead, officials are considering the possibility of selling excess energy from the Itaipu hydropower plant to miners, rather than exporting it to Brazil and Argentina.
Senator Lilian Samaniego has confirmed that a public hearing will be held on April 23 to discuss the advantages and disadvantages of Bitcoin mining in the country. This comes just a week after lawmakers introduced a draft law to temporarily ban Bitcoin mining for 180 days. The reason behind the ban is the claim that illegal cryptocurrency mines have been stealing power and causing disruptions to the country’s electricity supply.
However, a few days later, Paraguayan lawmakers approved a declaration supporting local and foreign investment infrastructure. Senator Salyn Buzarquis hopes that this declaration will prompt the Paraguayan Ministry of Industry to study the economic benefits of selling excess energy to Bitcoin miners instead.
According to a letter sent to Congress on April 8 by Buzarquis, there are currently 45 licensed cryptocurrency miners in Paraguay who are expected to generate $48 million for the National Electricity Administration (ANDE) by 2024. This figure is projected to reach $125 million by 2025 as miners install more equipment.
By selling excess energy to local Bitcoin miners at $40 per megawatt-hour (MWh), ANDE could achieve a 45% net profit margin. This would amount to $73 million annually, plus an additional $17 million in value-added tax for the treasury. Buzarquis even suggests that Bitcoin mining operations could save ANDE from bankruptcy.
Buzarquis also mentioned that Paraguay currently sells energy to Brazil at a subsidized rate of $10/MWh. Furthermore, cryptocurrency mining could create more job opportunities for the local economy.
In the earlier bill introduced on April 4, lawmakers argued that there have been 50 cases of power supply interruptions due to cryptocurrency miners illegally tapping into electricity sources since February. If the bill is passed, it could affect Marathon Digital Holdings, one of the largest industry players, which expanded into Paraguay last November.
The controversy in Paraguay comes at a time when Bitcoin miners are preparing for the upcoming Bitcoin halving event on April 20. This event will reduce miner rewards from 6.25 BTC ($442,000) to 3.125 BTC ($221,000).
In related news, Wolf Of All Streets, a magazine, expresses concerns about a world where Bitcoin reaches $1 million, calling it the “Hall of Flame”.