Paraguay’s crypto miners are appealing to the state electricity board to reconsider a planned price hike, warning of significant economic impacts and potential job losses. This article details the miners’ concerns and the broader implications for the industry.
Points
- Price Hike Impact: Upcoming electricity price increase and its potential effects.
- Economic Concerns: Predicted losses and job impacts.
- Miners’ Appeal: Urging the government to reconsider the hike.
- Industry Implications: Broader impacts on Paraguay’s crypto mining sector.
Paraguay’s cryptocurrency miners are urging the state electricity board, Administración Nacional de Electricidad （ANDE）, to reconsider a planned electricity price hike. The miners argue that the increase, set to take effect on August 1, will have severe economic repercussions, potentially driving 70% of legal crypto miners out of business.
Price Hike and Economic Concerns
ANDE announced that the price hike would raise electricity costs by up to 16% for legal cryptocurrency miners. This follows a 54% fee hike in 2022 when miners began signing new five-year agreements with ANDE. Jimmy Kim, spokesperson for the Chamber of Digital Asset Mining （Capamad）, expressed disappointment and concern over the decision, highlighting the potential economic fallout.
“We are incredibly disappointed that Paraguay’s state electricity board, ANDE, confirmed that electricity prices will increase by up to 16% for legal cryptocurrency miners in the country from August 1. This follows a 54% fee hike in 2022 when miners started to sign new five-year agreements with ANDE
.” – Jimmy Kim
Predicted Economic Impact
Capamad estimates that the upcoming price hike could force 70% of legitimate crypto mining operators out of business, resulting in thousands of direct and indirect job losses. The potential shutdown of these operations threatens over $1.5 billion in planned technology and infrastructure investments. The organization believes that the increased costs will make legal crypto mining unsustainable in Paraguay, pushing miners to either shut down or move their operations elsewhere.
Miners’ Appeal to the Government
Capamad and its members are urging the government to reconsider the planned price hike. They argue that while action against illegal mining activities is necessary, penalizing legitimate operators will harm the economy and drive investment out of the country. Jimmy Kim emphasized the need for a balanced approach that supports legal operations while cracking down on illegal activities.
“Our members are now facing difficult decisions about how to make ends meet. We call upon ANDE to urgently review the planned increase in order to protect a vital source of revenue for Paraguay’s economy.” – Jimmy Kim
Government Response and Legal Actions
In response to the appeals, the government has announced more severe penalties for the illegal theft of electrical energy. However, this does not address the concerns of the legal operators who are facing the brunt of the price hikes. Capamad continues to advocate for a reassessment of the electricity pricing structure to ensure the sustainability of legal mining operations in the country.
Conclusion
The impending electricity price hike in Paraguay poses significant challenges for the country’s legal cryptocurrency mining sector. The potential economic impact, including job losses and the threat to substantial investments, underscores the need for a balanced approach by the government. By reconsidering the price increase and addressing the concerns of legal operators, Paraguay can protect its burgeoning crypto mining industry and ensure its continued contribution to the economy.
解説
- Price Hike Impact: The planned electricity price increase of up to 16% for legal cryptocurrency miners could force 70% of operators out of business.
- Economic Concerns: The price hike threatens over $1.5 billion in planned technology and infrastructure investments and could result in thousands of job losses.
- Miners’ Appeal: The Chamber of Digital Asset Mining （Capamad） urges the government to reconsider the hike to protect the industry’s economic contributions.
- Industry Implications: Addressing the concerns of legal operators is crucial to maintaining the sustainability and growth of Paraguay’s crypto mining sector.