The substantial power charge increases the government has made for cryptocurrency mining activities are hurting the profitability of Paraguayan mining enterprises.
According to reports from Braiins Mining business developer Nano Grijalba, mining hosting has become unprofitable in Paraguay as a result of the change in power fees following the veto of the cryptocurrency law.
Increase in Bitcoin Mining Power Fees Hurts Paraguayan Businesses
Paraguay’s reputation as a refuge for bitcoin and cryptocurrency miners has shifted.
The price increases the government has implemented expressly for the cryptocurrency mining business have led to complaints from Paraguayan miners.
According to reports from Nano Grijalba, the business developer for Braiins Mining, this price increase of more than 50% blatantly discriminates against bitcoin miners under the pretext that the sector only generates a small number of employment.
It is dubious why Paraguay decided to raise rates for clean companies like bitcoin mining while luring in high-emission industries with low prices.
Grijalba expressed worries with the country’s hosting industry, which entails providing mined logging maintenance services to other parties.
In July of last year, the Paraguayan Congress approved a legal framework to control cryptocurrency mining and exchange activity in the nation, setting limits on the electricity costs for mining.
Mario Abdo Benitez, the president in office at the time, rejected this measure in August, claiming that the industry was characterized by “high electrical energy consumption, with intensive use of capital and little use of labor.”
Furthermore, according to Abdo Benitez, as cryptocurrency mining grows, the nation may eventually need to import electricity.
Without the support of the president, Congress attempted to enact the cryptocurrency law project, but it lacked the necessary votes and was ultimately abandoned in December.
According to Grijalba, miners and government officials are presently collaborating to reintroduce laws that would decrease the burden that miners currently bear.
To make it more desirable once again, a new decree is currently being prepared; we anticipate that it will address the problem of import tariffs, another weak area.
However, no other information was provided regarding this new law.
In order to strengthen the country’s economy, Grijalba urged the normalization of these activities.