Paraguay is facing a potential economic downturn as lawmakers consider a bill to ban cryptocurrency mining. According to industry experts, this move could result in annual losses exceeding $200 million.
Proposed Bitcoin Mining Ban in Paraguay Could Cost the Country $200 Million Annually
The bill aims to crack down on illegal cryptocurrency mining operations that have reportedly stolen power and disrupted the country's electricity supply.
If enacted, the proposed ban would last for 180 days or until the new legislation is implemented and the national power grid operator ensures adequate energy supply.
Jaran Mellerud, co-founder and chief mining strategist at Hashlabs Mining, warned that banning Bitcoin mining could have significant financial repercussions for Paraguay.
He estimated potential losses of over $200 million per year, based on the assumption that there are legal miners in the country operating at 500 megawatts and paying $0.05 per kilowatt-hour in operating expenses.
Considering that Paraguay has a relatively small population of 6.8 million and a GDP of $41.7 billion, which is the 94th largest in the world, markets of this scale are rare in the country.
Bitcoin mining has been a lucrative industry in Paraguay and has contributed positively to the country's trade balance.
However, the proposed ban threatens to disrupt this economic activity, affecting both local and international mining companies.
*This is not investment advice.
