- Paraguay lawmakers have proposed a bill to temporary ban crypto mining and related activities in the South American nation.
- The ban would last 180 days or until new laws are enacted and the national power grid operator can ensure it can supply sufficient energy.
Paraguay lawmakers have proposed a bill to temporarily ban crypto mining and related activities in the South American nation, saying illegal crypto mines are stealing power and interrupting the electricity supply.
The draft law introduced on April 4 would ban (translated) “the installation of crypto mining farms” along with ”the creation, conservation, storage and commercialization” of cryptocurrencies.
Its broad scope seemingly aims to regulate crypto staking — “the creation of new crypto assets” — and wallets — “the conservation and storage activities of crypto assets.”
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The ban would stretch for 180 days — around six months — or until a full law is enacted and power grid operator the National Electricity Administration (ANDE) guarantees it can supply enough energy to crypto miners “without affecting other users of Paraguay’s electrical system.”
A highlighted and translated excerpt of the draft law outlining what would be banned. Source: Republic of Paraguay Congress
Noted in the draft is the “significant boom” of crypto miners setting up in Paraguay, reportedly attracted to its “abundant hydroelectric energy.”
The Alto Paraná region in the county’s southeast bordering Brazil and Argentina is an area crypto miners have flocked to, the draft states.
The area houses the Itaipu hydroelectric dam — the world’s third largest supplying all of Paraguay’s domestic electricity needs.
Since February, the region has seen 50 cases of interrupted power supply linked to crypto miners clandestinely and illegally hooking into the grid, it claimed.
ANDE estimates each so-called “crypto mining farm” causes damages and losses of up to around $94,900 (700 million Paraguayan guaraníes) and claims the yearly estimated losses in Alto Paraná could climb up to $60 million (420 billion Paraguayan guaraníes).
The draft claims crypto regulations would mean Paraguay could better supervise the industry, and the legal void is causing issues for Paraguay with digital assets short on consumer protections along with having possible use in money laundering and tax evasion.
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In 2022, Paraguay came close to passing a tax and legal framework for the crypto and crypto mining sector but was vetoed by then-president Mario Abdo Benítez over concerns mining’s high power consumption would hamstring expanding a sustainable energy system.
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Disclaimer: The information provided is not trading advice, Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.