Crypto miners in Paraguay are appealing to the government to reconsider an imminent electricity price hike, warning that it could harm the country’s economy and result in substantial financial losses.
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Paraguay’s state electricity board, ANDE, announced a 16% price hike for legal crypto miners.
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Miners argue the increase will make legal mining unsustainable and cause job losses.
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The price hike follows a previous 54% fee increase in 2022.
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Up to 70% of legitimate crypto miners could go out of business.
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The Paraguayan government has invested in hydropower plants, aiming to attract crypto miners.
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Miners advocate for a review of the pricing policy to maintain the industry’s viability.
Crypto miners in Paraguay are urging the government to reconsider a planned 16% increase in electricity prices, announced by the state electricity board, Administración Nacional de Electricidad （ANDE）. The miners warn that this price hike could render legal mining operations unsustainable, potentially resulting in significant job losses and economic harm.
The proposed 16% increase follows a substantial 54% fee hike imposed in 2022, further exacerbating the financial strain on mining operations. Legal miners argue that the cumulative effect of these increases could force up to 70% of legitimate crypto miners out of business. They emphasize that the electricity price hikes contradict Paraguay’s previous efforts to position itself as an attractive destination for cryptocurrency mining.
Paraguay has invested heavily in hydropower plants, leveraging its abundant and relatively cheap electricity to lure crypto miners. This strategic move was intended to create jobs, stimulate economic growth, and generate additional revenue for the country. However, miners now argue that the electricity price hikes undermine these goals and could drive the industry into the shadows, where illegal operations may flourish without regulatory oversight.
A spokesperson for the miners highlighted the potential consequences of the price hike: “Legal mining operations will become unsustainable, leading to massive financial losses and significant job cuts. This decision jeopardizes the investments made in hydropower infrastructure and the economic benefits that legal mining brings to Paraguay.”
In response, the miners are advocating for a review of the pricing policy, calling for a more balanced approach that ensures the viability of legal mining operations while still contributing to the country’s revenue. They suggest that maintaining competitive electricity rates is essential to sustain the growth and development of the crypto mining industry in Paraguay.
The miners’ appeal underscores the delicate balance that countries must strike between attracting innovative industries like cryptocurrency mining and managing the economic and infrastructural impacts of such activities. The outcome of this pricing policy review will likely influence the future landscape of crypto mining in Paraguay and could serve as a precedent for other nations navigating similar challenges.