Paraguayan Senators Propose Bill to Ban Crypto Mining and Crypto Assets
On April 3, a group of fourteen senators from Paraguay introduced a bill in the Senate to prohibit the creation, storage, and trading of virtual assets, as well as the establishment of crypto mining facilities in the country. Among the senators behind this proposal are Colym Gregorio Soroka, Ever Federico, and Regina Lizarella.
Reasons for the Ban on Crypto Mining
- The senators argue that crypto miners are exploiting the country’s hydroelectric energy resources, primarily in the Alto Paraná region.
- More than fifty crypto mining sites were discovered in Alto Paraná by February 2024, leading to significant energy consumption and losses for the National Electricity Administration (ANDE).
- The illegal connections in these mining farms result in the theft of 28% of energy consumption, causing substantial financial losses for ANDE.
The Call for Regulatory Framework
- Concerns have been raised about the lack of consumer protection, crime prevention, market stability, transparency, and energy efficiency in the crypto mining sector.
- The senators propose the establishment of clear regulations to govern crypto mining activities, covering legal, financial, and security aspects.
- Key focus areas for the regulatory framework include energy consumption, pricing, equitable access to energy resources, and environmental impact mitigation.
Recent Actions Against Crypto Mining
- ANDE recently intervened in a crypto mining facility in Ciudad del Este, Alto Paraná, due to an irregular connection, leading to financial penalties and potential imprisonment for those involved.
- Despite existing regulations, Paraguay remains an attractive destination for crypto miners due to its abundant hydroelectric energy supply, notably from the Itaipu Dam.
Hot Take: Impact of Paraguay’s Proposed Crypto Mining Ban
As a crypto enthusiast, it is essential to consider the implications of Paraguay’s proposed ban on crypto mining and virtual assets:
While the concerns raised by the senators regarding energy consumption and illegal connections are valid, a complete ban on crypto mining could stifle innovation and economic growth in the country. Regulating the sector through clear guidelines and oversight could be a more balanced approach to address these issues without curtailing opportunities in the crypto industry.
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