• Paraguayan bitcoin mining companies are experiencing a significant decrease in profitability due to the government’s power fee hikes of over 50%.
• Business developer Nano Grijalba of Braiins Mining has expressed concern over the discriminatory nature of the fee hikes and its impact on the hosting activity in the country.
• The Paraguayan Congress passed a legal framework to regulate cryptocurrency mining and exchange activities in the country, however the law was vetoed by the current president of Paraguay.
Paraguay has long been seen as an attractive destination for cryptocurrency miners, however the country’s government has recently implemented power fee hikes of over 50% for cryptocurrency mining activities, creating an unfavorable environment for miners and significantly reducing their profitability. Nano Grijalba, business developer of Braiins Mining, has spoken out about the discriminatory nature of the fee hikes and its impact on the hosting activity in the country. He noted that the costs and margins of the international market have made offering this service impossible due to the high fees.
Grijalba also raised concerns about the environmental logic of these measures, stating that “Paraguay’s decision to increase fees for bitcoin mining, a clean industry, while attracting high-emissions industries with low fees, is questionable. We must prioritize support for clean industries for a sustainable future.”
In July of last year, the Paraguayan Congress passed a legal framework to regulate cryptocurrency mining and exchange activities in the country, establishing limits to the power fees for mining. However, this law was vetoed in August by the current president of Paraguay, further cementing the unfavorable environment for miners.
The power fee hikes have caused significant losses for Paraguayan mining companies and have put the future of the hosting activity in the country into doubt. As a result, many miners are looking to other countries to pursue their activities, as the high costs make mining in Paraguay unprofitable. This has led to a decrease in the number of miners, and a decrease in the number of jobs the industry is creating.
It remains to be seen how the government will respond to the negative impacts of the power fee hikes, and if they will reconsider their decision to veto the legal framework that was proposed to regulate cryptocurrency mining and exchange activities. Until then, Paraguayan miners will continue to struggle to make a profit in the country.