Approved by the Paraguayan Senate last July, the law to recognize cryptocurrency mining as an industrial activity was finally refused by Mario Abdo Benítez, the president of the South American country. According to him, the high electricity consumption of mining could slow the expansion of a sustainable national industry.

Paraguay closes doors to mining

Decidedly, things are getting more and more agitated in South America. After Argentina, it’s the turn of Paraguay to make the news of cryptocurrencies. The President, Mario Abdo Benítez, has decided to block a bill aiming to recognize cryptocurrency mining as an industrial activity.

The Paraguayan president estimated that the energy consumption linked to the mining of cryptocurrencies was too important and that she could curb the country’s industrial expansion. Moreover, he explains that the activity requires significant investments to develop, but that it does not call on with very little labor.

In other words, cryptocurrency mining does not create enough jobs and would therefore not generate added value as well as other industrial activities. However, in 2020, the most sought-after skill by employers on LinkedIn was “blockchain” and the list of jobs in this sector climbed 615% in 2021 in the United States.

Finally, the Paraguayan president also fears that if the cryptocurrency mining activity were to really develop, the energy consumption caused would swallow up that of other activities. It even provides that “in the next four years, [le Paraguay] will have to import electricity”.

Paraguay, potential representative of ecological mining?

According to the author of the bill, Senator Fernando Silva Facetti, the aim was also to promote cryptocurrency mining through the use of excess electricity. Moreover, it is important to note that Paraguay is a major producer of green energy, particularly through hydroelectric dams.

For the moment, the surplus electricity produced by Paraguay is exported and sold. However, another law passed by the Senate also included that the company operating the dams could sell these surpluses. at an extremely competitive price to the industries of the country wishing itwith an exemption from VAT.

Finally, low energy costs in Paraguay have already encouraged many companies (local or foreign) to install their cryptocurrency mining infrastructure there. In December 2021, household electricity costs were $0.058 per kWh and business costs were $0.049 per kWh, according to World Energy Price Reports.

So many ingredients that could have made Paraguay a model in the world of tomorrow. With a more lenient taxation policy than elsewhere, inexpensive and above all mostly renewable electricity, the South American country could certainly have attract a lot of companies to its territory.