This week, a coalition of 15 senators in Paraguay has introduced legislation to halt the mining of Bitcoin and other cryptocurrencies within the nation.
The lawmakers’ rationale for this move centers on the significant energy consumption and the proliferation of illicit activities attributed to the unregulated nature of cryptocurrency mining.
The senators’ bill seeks to implement a temporary ban on the generation, preservation, storage, and trading of virtual assets or crypto-assets, cryptocurrencies, and the installation of cryptocurrency mining facilities across Paraguay.
A Sudden Heatwave Increased The Overall Mining Costs
Initially, the ban was to last 180 days or until the country developed specific regulations for the industry. Despite the proposal’s broad scope, legislators themselves emphasized that their primary concern lies with Bitcoin mining, attributed to the high energy consumption of the operations.
Politicians believe it’s essential that the country establishes an infrastructure capable of supporting mining operations without compromising the current power grid. Currently, the country is experiencing a heatwave that has increased energy consumption nationwide, prompting discussions about the state of the nation’s infrastructure in this field.
However, some members of the cryptocurrency market have criticized the proposal’s broad reach. They argue that prohibiting the storage of cryptocurrencies could extend to banning activities like the staking of digital assets or even storage in digital wallets.
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Whether the Paraguayan Senate will approve the bill remains uncertain. However, the group of senators behind the initiative makes up a third of the current 45 senators, suggesting legislators will consider the proposal seriously in the coming months.
Paraguay Is Deeply Affected By Illegal Mining
Paraguay has been gaining international recognition in the cryptocurrency mining sector due to its wealth of renewable energy sources, which are both abundant and inexpensive.
This advantageous energy situation enhances the profitability of mining operations while circumventing environmental concerns commonly associated with the process.
The Paraguayan authorities recently unveiled a new strategy to combat illegal Bitcoin mining within the country. The initiative, set to be implemented by the nation’s Public Ministry and Judicial Power, comes in response to a surge in unauthorized mining activities in recent years.
In a statement regarding the issue, authorities emphasized that illegal cryptocurrency mining has been “impairing the quality of electrical service” in Paraguay. In response, the country aims to “coordinate joint efforts to tackle irregular connections in the electrical supply by individuals involved in crypto mining activities.”
