Legal cryptocurrency mining operations are an intelligent and beneficial way to deploy surplus energy generated by Paraguay’s extensive hydropower network, says Javier Giménez, Paraguay’s Minister of Industry and Commerce.
Giménez confirmed that pursuing cryptocurrency mining operations is not a specific industrial policy of the Paraguayan government, mainly due to it not leading to greater employment opportunities, but noted that the government did understand the potential benefits of cryptocurrency mining operations, particularly in the short term.
“We want the development of labor and employment to come from that energy,” he said in an interview with Radio Anduti. Meanwhile, “cryptocurrency mining is still a good option because it pays more”, he added.
Currently, there is so much surplus energy being produced by the hydropower dams that they don’t run anywhere close to full capacity. Meanwhile, Paraguay only uses approximately 45% of the energy produced, with the rest being transferred to Brazil.
Brazil pays around US$12 per megawatt (MW) for the excess power – whereas the special rate for legal cryptocurrency mining operations is around US$40 per MW. Therefore, Paraguay could benefit substantially from simply selling surplus energy to Paraguay-based cryptocurrency miners rather than exporting it at a 70% discount.
Giménez was keen to stress that whilst the government wants industries that create many jobs for Paraguayans – which cryptocurrency mining does not – the sale of excess energy to Brazil doesn’t create any additional jobs either.
Bitcoin enthusiasts across Paraguay – and indeed the world – have been keen to stress the difference between legal cryptocurrency mining operations, and illegal cryptocurrency mining operations.
“The illegal Bitcoin miners are just stealing electricity”, said one industry insider who asked for anonymity. “Bitcoin is not the problem. Bitcoin mining is not the problem. The problem is theft of electricity. If Paraguay can prevent theft of electricity, and instead sell the surplus electricity to legal Bitcoin miners, the government will have higher revenues”.
Paraguay’s National Electricity Administration (ANDE) has estimated total losses from stolen electricity to be G13billion (approx US$1.73million) so far in 2024.
Interesting!