Paraguay is the promised land of crypto mining in Latin America at the moment, according to a new report. Although legislators have paved the way for big foreign miners to transfer their operations to the country, critics are even more outspoken, stating that the government had only the bigger (and foreign) players in the mining game in mind.

New Measure

The Paraguayan Senate approved a measure last month that would govern crypto mining and trade in the country. The law, which has been in the works since September 2021, aims to legalize mining while also requiring miners to pay taxes and register their operations.

Many Paraguayan politicians have stated that the mining industry has the potential to be a substantial source of revenue for the government and electricity corporations. The country is home to a number of huge hydroelectric power plants that produce surplus power on a regular basis.

Because surplus electricity is frequently inaccessible to Paraguayans, numerous proponents have advocated for multinational miners to be encouraged to set up businesses near dams and power facilities. While most businesses have a limited need for intermittent power supply, miners’ rigs may make use of electricity when it is available and sit idle when it is not.  Thus Paraguay is the promised land of crypto mining in Latin America.

Courting Big Miners

Miners from as far away as Canada and China have already been courted, and discussions with some of the parties escaping China’s crypto crackdown in September 2021 are still underway.

El Pais said that the country’s supply of extremely cheap power has transformed it into a promised land for successful Bitcoin mining, noting that past “jungles” in Ciudad del Este, San Pedro, and Paraguay have already become important mining sites.

This is also true in “rural towns” with large ethnic German populations, such as Villarrica.

The measure, which must either be adopted or vetoed by President Mario Abdo Bentez, will determine the fate of the country’s cryptocurrency mining industry.

Criticism

However, Luis Bentez, a university professor and long-time home crypto miner, claims that only industrial miners would benefit, while “amateur and domestic” miners will earn nothing. Before drafting the law, MPs, according to Bentez, primarily met with huge mining businesses and drafted legislation extremely quickly, without taking into account concerns relevant to energy and tax policy.

In fact, electricity firms have raised their worries as well. A national energy supplier has previously requested that the government require miners to pay for electrical power in advance and settle their bills in USD.

Other critics have stated that electrical energy should instead be donated to the poorer families in the nation.

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