2024

Bitcoin

Million

<h2 id="key-points">Key Points</h2> 
<ul> 
 <li>In April, Paraguayan lawmakers introduced a bill proposing a temporary ban on mining Bitcoin and crypto in the country.</li> 
 <li>If the bill passes, it would mean significant losses for the country’s economy.</li> 
</ul> 
Last month, Paraguay started discussing setting stricter regulations on mining Bitcoin and crypto in the country. 
According to <a href="https://www.forbes.com/sites/digital-assets/2024/04/07/paraguay-considers-tightening-regulations-on-bitcoin-mining/" rel="nofollow noopener" target="_blank">Forbes</a>, the government of Paraguay, which had previously attracted cryptocurrency miners with its low electricity prices, is now seeking to regulate this activity. 
The proposal, which was introduced on April 3 by the senatorial chamber at the National Congress, suggests a temporary ban on Bitcoin mining in the country. 
According to the reports, the proposed law also aims at prohibiting trading and storing crypto. 
This proposal comes after concerns about the following issues: 
<ul> 
 <li>Illegal Mining:&nbsp;A surge in illegal mining operations that steal electricity and disrupt the national power grid.</li> 
 <li>Energy Consumption: The high energy consumption of Bitcoin mining is straining Paraguay’s resources.</li> 
</ul> 
The proposed bill seeks a 180-day ban on installing and operating crypto-mining farms. This could be extended until new regulations are established and the national power grid can handle the additional strain. 
<h2 id="effects-of-a-potential-bitcoin-and-crypto-mining-ban-on-the-economy">Effects of a potential Bitcoin and crypto mining ban on the economy</h2> 
Forbes interviewed Paraguayan Bitcoin analyst Joaquin Morinigo, who stated that if the proposed bill becomes law, this would directly affect 50 legally operating mining companies that have contracts with the National Energy Administration, with contracts ranging from 6 MW to 100 MW. 
The analyst also said that this would also impact all crypto users in Paraguay by prohibiting trading and storing crypto. 
<blockquote class="twitter-tweet" data-width="500" data-dnt="true"> 
 Senadores paraguayos quieren prohibir una industria que genera millones de dólares al gobierno paraguayo y representa una oportunidad única para obtener la soberanía energética. <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f9f5.png" alt="🧵" class="wp-smiley" style="height: 1em; max-height: 1em;"><a href="https://t.co/VQzupyRpHJ" rel="nofollow" target="_blank">https://t.co/VQzupyRpHJ</a> 
 — Joaquin Morinigo <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f1f5-1f1fe.png" alt="🇵🇾" class="wp-smiley" style="height: 1em; max-height: 1em;"><img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f3f4-200d-2620-fe0f.png" alt="🏴‍☠️" class="wp-smiley" style="height: 1em; max-height: 1em;"><img src="https://s.w.org/images/core/emoji/14.0.0/72x72/26a1.png" alt="⚡" class="wp-smiley" style="height: 1em; max-height: 1em;"> (@criptoboi) <a href="https://twitter.com/criptoboi/status/1775961888809242888?ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">April 4, 2024</a>
</blockquote> 
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
The Paraguayan economy could lose over $200 million annually fee if the bill passes. As of today, April 8th, 2024, the bill is still under consideration. It’s unclear yet if it will be passed or amended. 
Bitcoin mining provides a significant positive contribution to Paraguay’s trade balance, according to Hashlabs Mining co-founder and chief mining strategist Jaran Mellerud. 
The Bitcoin mining firms in Paraguay have to<a href="https://www.senado.gov.py/index.php/noticias/noticias-presidencia/10032-sancionan-normativa-que-regula-la-comercializacion-de-criptoactivos-2022-07-14-23-28-02" rel="nofollow noopener" target="_blank"> register and receive authorization</a> from the Paraguayan Ministry of Industry and Commerce. 
If the bill passes, this could reportedly impact one of the industry’s largest players, Marathon Digital Holdings, which <a href="https://ir.mara.com/news-events/press-releases/detail/1332/marathon-digital-holdings-continues-international-expansion" rel="nofollow noopener" target="_blank">started deploying 27 megawatts</a> around the Itaipu hydroelectric power plant last November. 
The Itaipu Dan became a popular site for miners to set up and it’s currently supplying all of the local electricity in Paraguay. 
The controversial move regarding Bitcoin and crypto mining in the country comes just ahead of the<a href="https://crypto.ro/en/news/countdown-begins-bitcoin-halving-just-a-fortnight-away/"> Bitcoin halving event</a> that is scheduled to take place on April 20. The event will cut miner rewards from 6.25 BTC to 3.125 BTC. 
<figure id="attachment_38446" aria-describedby="caption-attachment-38446" style="width: 100%" class="wp-caption alignnone">
 <a href="https://coinmarketcap.com/currencies/bitcoin/" rel="nofollow noopener" target="_blank"><img loading="lazy" decoding="async" class="wp-image-38446 size-full" src="https://crypto.ro/en/wp-content/uploads/2024/04/BTC_1D_graph_coinmarketcap-13.jpg" alt="Bitcoin price trajectory" width="718" height="475" title="Paraguay Could Lose $200 Million Annually If Bitcoin Mining Ban Passes 9" srcset="https://crypto.ro/en/wp-content/uploads/2024/04/BTC_1D_graph_coinmarketcap-13.jpg 718w, https://crypto.ro/en/wp-content/uploads/2024/04/BTC_1D_graph_coinmarketcap-13-300x198.jpg 300w" sizes="(max-width: 718px) 100vw, 718px"></a>
 <figcaption id="caption-attachment-38446" class="wp-caption-text">
 Bitcoin price trajectory
 </figcaption>
</figure> 
At the moment of writing this article, BTC is trading in the green, and the coin is priced above $70k on <a href="https://coinmarketcap.com/currencies/bitcoin/" rel="nofollow noopener" target="_blank">CoinMarket Cap</a>. 
Recently, on-chain analytics firm Santiment has noted that the flow of spot Bitcoin exchange-traded funds (ETF) is <a href="https://crypto.ro/en/news/bitcoin-etf-trades-to-remain-strong-in-lead-up-to-halving-predicts-santiment/">likely to remain high</a> until the upcoming <a href="https://crypto.ro/en/cryptocurrencies/bitcoin/">Bitcoin</a>&nbsp;halving event.

Paraguay Could Lose $200 Million Annually If Bitcoin Mining Ban Passes

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