Paraguay is a prosperous place to start mining. In the previous days, a bill has been presented that would read as follows: "TEMPORARILY PROHIBITING THE CREATION, CONSERVATION, STORAGE, AND COMMERCIALIZATION OF VIRTUAL ASSETS OR CRYPTOASSETS, CRYPTOCURRENCIES, AND THE INSTALLATION OF CRYPTOMINING FARMS ON PARAGUAYAN TERRITORY". The bill is a measure that legislators, as described in their motivations, found reasonable to combat the proliferation of illegal farms.
How do these illegal farms work?
Choose a plot of land, build a hosting where they generally store machines of dubious origin. Next, corrupt officials from the ANDE1 are requested, through bribery, to connect you to the Medium Voltage system and your mining is up and running. To avoid further inconveniences, a bribery scheme kicks in where everyone is involved: businessmen, drug traffickers, mobsters, authorities from the Prosecutor's Office, Judges, and of course, the same company that provides the electricity.
Context
Paraguay has experienced a heatwave, unlike anything seen in many decades, which has caused the demand for electricity to reach new historical peaks. According to the ANDE, one of the causes of the electrical failures would be the miners who connect to the electrical system. In the first 90 days of 2024, there were raids on these illegal mines where the equipment was "seized". The mentioned company directly blamed the mining sector for these mentioned failures.
The Law
Taking this context into account, the law has these characteristics:
- To prohibit, starting from the promulgation for 180 days, any activity related to cryptocurrencies, with an emphasis on mining farms.2
- In the first three articles, they request the prohibition of the creation, conservation, storage, and commercialization of any cryptoasset or cryptocurrency.
Is it stupid?
Yes. The law itself clashes directly against the National Constitution of the country since it states that you are guilty of carrying out a completely legal activity; this bill is a direct attack and has no relation whatsoever to the theft of energy or anything else.
Will the law work?
So...no. As stated, ANDE is working with those illegals, charging fees up to 3.000 USD per MW/h3; the bribery is strong with this and the draft bill is not helping anyone in any way.
And how do you know that the company works with the mobsters?
In the year 2016, the task of laying fiber optic cables to all the power substations throughout the country began, or in other words, the company knows which parts have consumption peaks, how much they need, where, when... and here comes the really funny part, the same company that today mourns the losses, gave contracts to many mining companies. So, where do we stand?
What should I do?
Come to Paraguay, it's just political noise and talk to natives or don't. Either way, nothing has changed. And in second case, just buy bitcoins and do what's best for you.
Footnotes
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The ANDE is the company that holds the total monopoly on the generation, distribution, maintenance, and commercialization of electric energy in Paraguay. ↩
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If you're living in Latin America, you know that those 180 days are not real. They'll ask for more time for any reason, similar to El Salvador's state of emergency that first was 90 dias but it's going more than 600 days ↩