Key Points
- Paraguay’s government is proposing a bill to imprison illegal Bitcoin miners for up to 10 years.
- The country is considering selling surplus energy to licensed Bitcoin miners.
Paraguay’s government is keen on pushing a legislation that could result in a maximum jail term of 10 years for unauthorized Bitcoin mining operators. This was revealed by the presidential spokesperson Paula Carro, who confirmed that the bill is already with the parliament.
Protecting Power Resources from Illegal Mining
The proposed legislation also seeks to permit the confiscation of mining equipment found with illegal miners. This includes electrical transformers, ASIC miners, and other related equipment. The government is giving this bill utmost priority.
The objective of this move is to safeguard the National Electricity Administration (ANDE) from the risks associated with illegal Bitcoin mining operations that consume large quantities of power. The government is looking to amend Article 173 of Paraguay’s Penal Code to provide for a maximum of ten years imprisonment for power theft.
Paraguay has been targeting illegal miners for some time now. Last year, a Bitcoin miner was fined $5,000 based on unbilled power consumption and the cost of ANDE’s intervention. In March, the country recorded its first legal conviction against two Bitcoin miners and subsequently shut down a mining farm in April.
Utilizing Surplus Energy for Mining
A new draft bill proposing a complete ban on Bitcoin mining in the country was introduced by lawmakers last month. The plan was to prohibit Bitcoin mining for 180 days or until new regulations were enacted. However, estimates indicated that such a blanket ban could be expensive, potentially costing the country more than $200 million annually.
The ban was eventually reconsidered, and a public hearing was held. Senator Salyn Buzarquis submitted a draft declaration highlighting the economic benefits of selling surplus energy to licensed miners. The senator noted that the 45 licensed Bitcoin miners in the country could generate $48 million for the ANDE. Furthermore, this figure could increase to $125 million by next year if miners expand their operations.
Paraguay’s mining industry is appealing to miners because of its surplus power, produced by several large hydroelectric power stations. Although Paraguay regularly sells excess energy produced by the Itaipu hydropower plant to Brazil and Argentina, officials are now considering selling this energy to licensed miners. In 2022, Paraguay was the fourth-largest net energy exporter in the world.
However, not everyone is in favor of selling surplus energy to Bitcoin miners. Some citizens and political critics argue that the government should provide the surplus energy to less fortunate families instead.
