Argentina has increased electricity charges and it has sent shock to crypto miners across the country. The miners residing in the nation have been shocked by the sudden plan to increase electricity rates. According to local media reports, the Ministry of Economy published a revis...
Argentina has increased electricity charges and it has sent shock to crypto miners across the country. The miners residing in the nation have been shocked by the sudden plan to increase electricity rates.
According to local media reports, the Ministry of Economy published a revised list of electricity rates. Reportedly, the ministry has sent miners a new rate of 17,240 Argentine Pesos (around $63.30) per megawatt-hour (MWh), the highest band on the ministry’s scale.
On the other hand, residential energy costs are heavily subsidized, with households entitled to enjoy subsidies of up to 70%. Reportedly, residential rates start at just under $11.30 per MWh.
Considering the divisions and implied rates, the increased prices puts crypto mining in the same energy price bracket as heavy industries, and above the levels paid by commercial enterprises. Notably, the revised rates come into force on August 1, and will run until October 31, 2023, when they could be changed again.
Differentiated electricity rates for crypto miners are a relatively new phenomenon in Argentina. In early 2022, the ministry announced that it was removing miners’ access to subsidized electricity, a move that sent the price of 1 MWh worth of power up from just under $17 to almost $48 for miners. Now, the new rise to above $63/MWh “may hinder the activities of local miners.” The local media stated:
The new measures mean everyone who [mines crypto] in the country is now under pressure.
In January last year, the Argentine government published an official definition of mining and announced a new mining policy. The government had wrote that the consumption of electricity by the cryptocurrency mining sector is characterized by its intensity and consistency, both hourly and seasonally.
Additionally, it stated that the emergence of crypto mining poses challenges to the infrastructure of the grids in which miners operate. Notably, to this, power firms say they have been trying to monitor crypto miners at a “national level.”
Sources suggest that the firms have already enjoyed some level of success with shutting down large-scale illegal crypto mining farms. On the other hand, they have previously admitted that smaller-scale “home connection” miners are much “harder to identify.”
While the concerns of energy consumption by miners have haunted regulators across the globe, last year Argentine state-backed oil company is using innovative ways to combat the issue. As reported by Todayq News a trial project to use flared or residual gas to power Bitcoin mining operations is being conducted by YPF Luz, a division of the state-owned YPF in Argentina.
Simultaneously, crypto has been giving hope to investors amid increasing economic challenges like inflation and currency devaluation. Notably, investors have been using crypto as a hedge against inflation.
Additionally, a report from earlier this month revealed that “crypto awareness” has risen to 75% in Argentina. Meanwhile, a leading lawmaker and a pro-crypto presidential candidate had suggested Argentina to adopt Bitcoin rather than follow dollarization plans.
© Todayq News