Paraguayan Bitcoin Miners: New Energy Tariffs Will Kill Our Industry

Author

Tim Alper

Author

Tim Alper

About Author

Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

Author Profile

Share

Copied

Last updated:

June 30, 2024 23:00 EDT

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

A newly formed association of Paraguayan Bitcoin (BTC) and altcoin miners says new energy tariffs could kill off the industry.

Per Criptonoticias, the body was speaking after the nation’s National Electricity Administration increased the cost of electricity for miners by between 13% and 16%.

Paraguayan Bitcoin Miners Say Price Hikes Are Too High

The Paraguayan Chamber of Digital Asset Mining warned that that the energy rate hikes “will have a significant negative impact” on the bitcoin mining industry.

And this, the chamber said, could “potentially lead to the disappearance of the sector in Paraguay.”

The chamber added that the price hike would result in Paraguay “losing significant amounts of revenue.”

Miners added that other adverse knock-on effects would include “job losses” and a “loss of confidence in the government.” They said:

“Energy is being sold to [crypto miners] at much higher prices – even up to 50% higher – than for other industries in Paraguay.”

The body stated that the Paraguayan government has taken a pro-business stance. It said the administration generally “promotes stability and a favorable environment for business.”

Morning Bid: Nvidia's half trillion hiccup; Bitcoin, China slide https://t.co/y7ijX3uGMb pic.twitter.com/Y7JqoiP6TE

— Reuters Politics (@ReutersPolitics) June 25, 2024

However, with its approach to crypto mining, the mining body said that the government was taking “actions that will affect, without justification, the existence of a sector that provides a lot of benefit to the country.” The body said:

“This situation will only project a negative image of the investment environment in Paraguay. It will significantly [undermine] the legal security necessary for investment – both domestic and overseas.”

The mining body comprises 12 major BTC mining players, including Muiden, Antilia Sur, Archer, Richford, and Bitfarms.

It formed in late June in an apparent bid to push for pro-business regulation. It claims that Bitcoin mining currently earns the Paraguayan economy $1.5 billion per year.

The proportion of Bitcoin traded over weekends has declined to an all-time low of 16% this year, according to cryptocurrency research firm Kaiko https://t.co/jn2MX1Ux5a

— Bloomberg Markets (@markets) June 29, 2024

New Tariffs Could Spark Job Losses, Industry Body Claims

However, the National Electricity Administration (ANDE) has labeled some 50 mining firms members of an “especially intensive consumption sector.”

The heaviest energy consumers in this group are facing monthly price rises of 16%, with tariffs increasing from USD/KW 55.88 to USD/KW 65.04.

ANDE has also been cracking down on illegal crypto mining. In conjunction with the police, it has helped seize almost 10,000 ASIC rigs from undeclared crypto mining centers.