Bitcoin mining is an industry that seeks to use a lot of power, or electricity, in a region where mining farms operate. This is manageable for some spaces but not every space. Paraguay, for one, has yet to start reporting power problems and is, therefore, considering banning Bitcoin mining via law. If approved, the law could potentially extend its coverage to crypto staking and wallets.
The situation has been defined as a conundrum, with speakers on both sides attempting to justify its legitimacy and illegitimacy.
The proposed ban further seeks to put a stop sign on illegal mining activities that cost the region $60 million a year. The bill proposes to temporarily slow down the activities by banning them for 180 days or until Paraguay implements a proper regulatory framework.
ANDE will simultaneously work to provide infrastructure support to the industry in a way that does not affect the rest of the grid or the demands of its users. Lawmakers have stated that the creation, preservation, storage, and commercialization of crypto assets are temporarily banned in Paraguay.
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That means not just Bitcoin mining but also the storage of cryptocurrencies in a wallet has been banned for some time. It further looks to ensure that no new Bitcoin mining farm has been installed in the native territory. Violation of the law will attract charges under the national financial system, the Central Bank of Paraguay, and criminal offenses, along with other applicable administrative sanctions.
The proposal for the bill also looks to tackle the issue of consumer protection and possible criminal activities like money laundering and evasion of taxes. However, it is specifically the illegal crypto-mining activity that is under the radar. It is also the same thing that has sparked concerns in the industry. Many are saying that a step toward controlling illegal crypto-mining activities is also affecting those who are genuinely functioning in the region.
They have backed their argument by saying that the proposed law does not distinguish between legitimate and illegal uses of crypto assets, adding that there is a dire need to consider the unintended consequences of the ban.
Luis Benitez, a free software activist, has sought a more precise law that protects users without hurting those who make economic contributions and register technological growth. He has also sought a balanced approach.
There is little chance that Paraguay will pay heed to any of it since reports have emerged stating that some of the Bitcoin mining farms have been using power that matches the level of the city where they are located. This pertains to the recent bust of Rado Quindii, where authorities uncovered 700 active ASICs.
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The bill is yet to become law in Paraguay. Both sides are making arguments. While the need of the hour is to conserve power, Paraguay cannot afford to slow down innovation in the technological sector. That could potentially invite withdrawals from the partners.
