Regulated Crypto Mining In Paraguay
Crypto mining and trading bill approved
Paraguay approved a bill that calls for regulation on crypto mining and trading last month. The bill was first introduced in December 2021, but was passed with modifications during the initial approval process, so it had to return to the upper chamber.
Ministry of Industry and Commerce: Primary law enforcement authority with the power/duty to penalize those mining or providing crypto services without proper authorization.
The National Electricity Administration: Enables energy supply for authorized miners and crypto services.
The Secretariat for the Prevention of Money or Asset Laundering: Supervises the entire investment processes of crypto companies.
The National Securities Commission: Commercialization of the obtained assets.
The new law states that individual and corporate miners must request authorization for industrial electricity consumption AND then apply for a license. The bill will also create a registry for any person or business seeking to provide crypto trading or custody services.
National Electricity Administration asks for higher rates for crypto mining companies
The bill was originally introduced with the intent of attracting international miners with low electric rates (around 5 cents per kilowatt-hour). The national average electric rate in the US is $0.15/kWh.
According to Paraguay’s National Electricity Administration (ANDE), the bill currently caps the rate that can be charged to miners at 15% above the industrial rate. Some miners are taking advantage and were paying between 80 and 160 times less than the amount for their real energy consumption.
Bitfarms, a leading Canada based mining company, is one of the largest miners operating in Paraguay. They currently operate a 10 megawatt mining facility in the country. Their coroporate hashrate is currently at 3.8 exahash per second (EH/s) throughout 158 megawatts of infrastructure. They also operate on 99% hydroelectricity and pay an average cost of $0.04/kWh.
