Due to the intense contribution of water energy to Paraguay, crypto miners have increased their interest in this South American country. However, the government does not have prejudice in favor of this activity. This conflict of interest might significantly affect both the national economy and crypto miners in Paraguay.
Crypto Mining In Paraguay: Need To Know
The rising number of crypto miners in Paraguay hasn’t gone unnoticed. More and more companies have invested in this region in the last couple of months. The most recognizable example is Marathon Digital Holdings, which set up 27 megawatts next to the essential hydropower plant located next to the Itaipu dam.
However, cooperation between the Paraguayan government and crypto miners has not gone as planned. On April 4th, lawmakers suggested that cryptocurrency mines steal power, eventually disturbing Paraguay’s electricity supply. The government is trying to introduce a bill to control these activities. This may result in a ban on crypto miners for up to 180 days.
Increase Of Interest In Paraguay
Traders should keep in mind why crypto miners chose Paraguay. This country wasn’t recognized as an essential player in the crypto world. What’s changed?
The answer is the upcoming Bitcoin halving. This event technically forces miners to look for alternative sources of energy that can be even more sustainable. That’s why Paraguay became favorable for miners, generating substantial amounts of electricity thanks to hydroelectric plants. However, this might end up due to the government’s decision.
Potential Outcomes
Paraguay’s government must somehow deal with the stealing power issue. Its resources are vital not only internally. Electricity from hydroelectric plants is exported to Brazil and other South American countries.
On the other hand, an anti-crypto attitude may not be a good solution due to economic reasons. According to Jaran Mellerud, a co-founder of Hashlabs Mining company, potential limitations of Bitcoin mining in Paraguay may cause losses of up to 200 million dollars. This calculation comes from the price of electricity paid by legal miners. Mellerud suggests that the entrance of crypto miners to Paraguay positively impacts the country’s trade balance.
