Paragyuan congresswoman María Constancia de Benítez has proposed a new bill that seeks to regulate the Bitcoin mining industry. This is the fourth bill related to cryptocurrency regulations that will enter Congress.
The proposal specifically focuses on leveraging renewable energy for the Bitcoin mining sector.
Regulating the crypto mining sector
Mining firms consider Paraguay a crypto mining haven due to the nation’s abundance of hydroelectricity. With the new proposal, Benítez plans to ensure that the nation’s bitcoin mining sector is complying with environmental regulations.
Further, the bill outlines how the Bitcoin mining sector can attract foreign investment. As a result, it is expected to open up both direct and indirect jobs.
Over the long haul, Benítez expects the mining sector to help position Paraguay as a technological hub in the region.
The proposal further emphasizes transparency for businesses related to crypto mining operations. A key area of focus in the bill regards mitigating electricity theft to fuel mining operations.
Last month, an illicit mining farm containing 2,738 crypto-mining units was seized in Salto del Guairá. The crackdown was initiated by the National Electricity Administration (ANDE) after it detected an unmetered connection in the area.
The operation alone resulted in 1.1 billion guarani, approximately $146,000, in losses for ANDE every month.
Prior to that, two operations conducted by ANDE resulted in the seizure of over 550 Bitcoin mining units.
According to the congresswoman, the rise in illicit mining operations has resulted in losses for the state. It also impacts the stability of the nation’s power supply.
Lastly, the bill aims to curb money laundering and terrorism financing via crypto mining operations. As such, the bill also includes a provision for registration requirements for related businesses.
Paraguay’s history with crypto regulations
Paraguay initially lacked solid regulations when it came to cryptocurrencies.
A bill targeting a digital asset strategy was introduced by Congressperson Carlitos Rejala and Senator Fernando Silva Facetti in 2021. It was passed into law by Congress the next year.
However, President Mario Abdo Benítez vetoed the bill, specifically objecting to the provisions involving cryptocurrency mining. The president reasoned that the high electricity consumption of the mining sector could hinder the expansion of a sustainable national industry.
Despite this, Paraguay continues to house some of the big names in the crypto mining sector. Marathon Digital and Bitfarms currently operate in the nation.
Stablecoin issuers Tether has also announced plans to invest in mining facilities in the area.
At the moment, another proposal introduced to Congress on April 3 2024, threatens to ban “the installation of cryptomining farms on Paraguayan territory.”
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