A newly formed association of Paraguayan cryptocurrency miners has issued a stark warning about the future of their industry. The group claims that recent energy tariff increases could lead to the sector's demise. Or simply put, Bitcoin mining in this lovely country will be over. Probably forever.
The National Electricity Administration has raised electricity costs for miners by 13% to 16%. This move has sparked concern among industry participants.
The Paraguayan Chamber of Digital Asset Mining stated that the price hikes will significantly impact the bitcoin mining industry. They warned that this could potentially lead to the sector's disappearance in Paraguay.
The chamber expressed concern about potential revenue losses for the country. They also highlighted risks of job losses and diminished government trust.
Miners argue that they face disproportionately high energy costs. "Energy is being sold to [crypto miners] at much higher prices – even up to 50% higher – than for other industries in Paraguay," they said.
The mining body, comprising 12 major players, formed in June to advocate for pro-business regulation. They claim that Bitcoin mining currently generates $1.5 billion annually for the Paraguayan economy.
The National Electricity Administration (ANDE) has classified some 50 mining firms as part of an "especially intensive consumption sector". The heaviest consumers in this group face monthly price increases of 16%.
Tariffs for these firms have risen from USD/KW 55.88 to USD/KW 65.04. ANDE has also been cracking down on illegal crypto mining operations.
The mining association argues that the government's approach contradicts its generally pro-business stance. They warn that these actions could negatively impact Paraguay's investment environment.
"This situation will only project a negative image of the investment environment in Paraguay," the body stated. They added that it will significantly undermine the legal security necessary for investment, both domestic and overseas.