Bitcoin mining chiefs in Paraguay say controversial new electricity rates for the sector will cost the country almost $1.5 billion and leave some 1,170 people out of work.
Per Criptonoticias, the claims came from the newly formed Paraguayan Chamber of Digital Asset Mining (Capamad).
Bitcoin Mining Chiefs Warn of Job Losses
The National Electricity Administration (ANDE) has announced a new rates program. This will see most industrial miners pay between 13% and 16% more per month for power.
Capamad claimed that the mining industry “could inject $1,478,630,000 into the Paraguayan economy by the end of the year.”
The rate rise, Capamad has claimed, could “kill off” the Bitcoin (BTC) mining industry, effectively pricing many players out of the market.
Capamad warned that ANDE’s “unsustainable” move would “affect 1,170 jobs “directly.” Other “indirect jobs” linked to the mining industry would also be in danger, it said.
The chamber added that the price rises “put the very presence of the sector at risk” in Paraguay.
It went further, adding that the move will “drive up legal uncertainty and an unprecedented loss of confidence in the Paraguayan state and its leaders.”
The Paraguayan Bitcoin mining industry relies heavily on overseas funding. In the past, investors have been attracted by Paraguay’s abundance of surplus hydroelectric power.
But ANDE is unconvinced. It fears that a sharp rise in mining could put its grids under pressure. It has also been fighting a battle against illegal miners.
In conjunction with the police, the power administration has overseen the confiscation of almost 10,000 ASIC mining rigs.
Bitcoin miners my have to resort to selling their holdings with network fees down and prices flat since the halving. https://t.co/qWhqh9wSWH
— Bloomberg Crypto (@crypto) July 2, 2024
Sell Miners Surplus Power, Industry Chiefs Urge
Capamad said that investments that “have strengthened the country’s economy and have positioned Paraguay as an international benchmark in the technology sector” are now at risk.
Currently, Paraguay sells much of its surplus power to other LATAM nations, notably Brazil and Argentina.
But, Capamad claimed, these sales “generate less income for Paraguay” than selling surplus power to BTC miners.
Capamad claimed that it was “not too late” for ANDE to reverse its decision, and help “position Paraguay as an attractive country for global investors.”
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