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.
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