Paraguayan mining companies are having an impact on their profitability due to the sharp increases in energy tariffs that the government has set for cryptocurrency mining activities. According to reports from Braiins Mining business developer Nano Grijalba, after the veto of the crypto law, the change in energy rates makes mining an unprofitable business in Paraguay.
Bitcoin mining energy fee increase hurts Paraguayan companies
Once seen as a haven for bitcoin and crypto miners, Paraguay has changed. Paraguayan miners are now complaining about price increases that the government has applied specifically for the cryptocurrency mining industry. According to reports from Nano Grijalba, business developer of Braiins Mining, this price increase of more than 50% is directly discriminating against bitcoin miners with the excuse of the low number of jobs generated by the industry.
Grijalba criticized the environmental logic of these measures. On this subject, he fixed:
Paraguay’s decision to increase fees for bitcoin mining, a clean industry, while attracting high-emissions industries with low fees, is questionable. We must prioritize support for clean industries for a sustainable future.
Hosting activity affected
Grijalba expressed concern about the future of the hosting activity in the country, which consists of offering mining record keeping services for third parties. He explained that the costs and margins of the international market made it impossible to offer this service.
The Paraguayan Congress approved a legal framework to regulate cryptocurrency mining and exchange activities in the country, setting caps on energy rates for mining in July last year. However, this law was vetoed in August by the current president of Paraguay, Mario Abdo Benítez, who stated that the industry was characterized by its “high consumption of electrical energy, with intensive use of capital and little use of labor.”
Abdo Benítez also explained that the growth of crypto mining could push the country to import energy in the future. Congress tried to pass the cryptocurrency bill without presidential support but lacked the necessary votes, ultimately shelving it in December.
Grijalba revealed that the miners are currently working hand in hand with the authorities to reintroduce laws that would lessen the burden that miners currently face. About this, Grijalba declared:
A new decree is currently being worked on to make it attractive again, we hope it addresses the issue of import taxes, another weak point.
However, no further details were provided about this new decree. Finally, Grijalba advocated for the normalization of these activities in the country for the benefit of the national economy.
What do you think about the state of bitcoin mining in Paraguay? Tell us in the comment section below.
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