Mining companies in Paraguay are taking a hit to profitability due to steep electricity rate hikes established by the government for cryptocurrency mining activities.Brains Mining’s business developer Nano Grijalba reports that after the veto of the crypto law, changes in electricity rates have made mining hosting in Paraguay a less profitable business.
Bitcoin Mining Power Fee Hurts Paraguayan Companies
Once seen as a haven for bitcoin and crypto miners, Paraguay has changed. Paraguayan miners are now complaining due to price increases applied by the government specifically for the cryptocurrency mining industry; Nano Grijalba, a business developer at Braiins Mining, reports that this price increase of over 50% is due to the low number of jobs the industry creates using the excuse that they are directly discriminating against bitcoin miners.
Grijalba criticized the environmental logic of these measures. On this issue, he statedthat:
Paraguay’s decision to raise fees for bitcoin mining, a clean industry, while attracting high emission mass production industries with low fees is questionable. Support for clean industries must be a priority for a sustainable future.
Affected Hosting Activities
Grijalba expressed concern about the future of hosting activities in the country, consisting of providing maintenance services for logs mined for third parties. He explained that costs and international market margins make it impossible to offer this service.
Last July, the Paraguayan Congress passed a legal framework regulating cryptocurrency mining and exchange activities in the country, establishing limits on electricity rates for mining. However, this law was rejected in August by Paraguay’s current president, Mario Abdo Benitez. He said the industry is characterized by “high consumption of electrical energy, intensive use of capital and little use of labor.”
Abdo Benitez also explained that the growth of crypto-mining activities may push the country to import energy in the future. Congress attempted to pass the cryptocurrency law project without the president’s support, but it lacked the necessary votes and was ultimately shelved in December.
Grijalba revealed that he is now working hand in hand with the authorities to reintroduce a law that would ease the burden faced by miners. In this regard, Grijalba declared that
We are currently working on a new decree to make it attractive again, and we hope that it will address another weakness, the import tax issue.
However, no further details were offered about this new decree. Finally, Grijalva called for the normalization of these activities in the country for the benefit of the national economy.
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