A group of fourteen senators, involving Colym Gregorio Soroka, Ever Federico, and Regina Lizarella, proposed a legislative bill in Paraguay. The bill aims at banning the creation, storage, and trade of virtual assets and prohibiting cryptocurrency mining operations. This proposal was presented in the Senate of Paraguay on April 3; the senators expressed their concerns about the extensive use of the country’s hydroelectric power by crypto miners, particularly in the region of Alto Paraná.

According to the senators, crypto mining operations exploit Paraguay’s energy resources, leading to significant financial losses for the National Electricity Administration (ANDE). They also pointed out the issue of illegal energy connections by crypto mining farms. The illegal activity means 28% of energy theft, contributing to a substantial part of the financial drain on the country’s electricity infrastructure.

Ban on crypto mining in Paraguay
Crypto mining equipment

The bill highlights the lack of consumer protection, market stability, and environmental considerations in the current practice of crypto mining. It advocates for a temporary prohibition on such activities until a comprehensive regulatory framework can be established. This framework would address legal, financial, and environmental aspects. It must aim to ensure fair energy consumption rates, equitable access to energy resources, and a minimized ecological footprint.

The proposed actions are set to be enforced following approval by the relevant legislative bodies. This move comes in the wake of ANDE’s intervention at a mining facility in Ciudad del Este, Alto Paraná, where an illegal electricity connection was discovered.

Despite these proposed restrictions, Paraguay has been a favorable location for crypto miners due to its abundant hydroelectric energy, primarily sourced from the Itaipu Dam, which significantly exceeds the country’s own energy needs.