Paraguay’s ban on crypto mining could result in $200M loss

A proposal by the government to suspend crypto mining could result in significant economic ramifications

A piece of law proposed earlier this month could see Paraguay prohibit crypto mining, and specifically the part of the industry that the country deems is “illegal.” Paraguay has been grappling with surging electricity demand that has put the national grid and utility companies on the backfoot.

The idea is to now go after illegal operations that are straining the utility network, and act against them decisively. This, however, could impact the regulated market, which is generating an estimated $200 million for the state. However, the government is also able to argue economics.

According to a government report, the damages caused by power disruptions tied to illegal mining are already costing the state $90 million every year. Yet, instead of disrupting the crypto manning industry as a whole Paraguay should seek out to root out illegal mining operators and ensure that licenses are issued to companies only in the instances when the country has the capacity to support mining.

Investing in additional grid capacity may not be the best course of action as Bitcoin and other crypto investors are not tethered to Paraguay or any other nation and may choose to migrate their operations elsewhere at any time. Paraguay stands to gain from the presence of a regulated crypto mining industry in the country, but a shift in regulation is now looming with potentially significant effects.

The bill has until April 20 to be shot down or to move forward.

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Written by Barney

Co-founder

Barney is co-founder of CryptoGamblingNews.com. When not at work he can usually be found behind a Nikon. He's won numerous international competitions for his photography and volunteers as a content creator for aid organisations in Africa.

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