Sokipiriye Dokubo
Paraguay finds itself grappling with power challenges, exacerbated by soaring temperatures and a surge in electricity demand driven partly by illegal cryptocurrency mining operations.
In response, lawmakers are pushing for a bill to temporarily halt activities related to the crypto ecosystem, citing the strain on the power grid. The proposed legislation aims to ban the creation, preservation, storage, and trading of virtual assets, including cryptocurrencies, as well as the installation of crypto mining farms within Paraguay’s borders.
The proposed ban would last for 180 days or until adequate regulations are established and infrastructure upgrades are made to support crypto mining without compromising the national grid.
However, critics argue that the bill’s broad language could inadvertently impact other crypto activities, such as staking and digital asset storage in wallets. Violations of the proposed law would carry sanctions in accordance with existing financial and criminal regulations.
The absence of a clear regulatory framework for the crypto sector has left room for concerns regarding consumer protection, money laundering, and tax evasion, according to the bill’s draft.
While the legislation targets illegal mining operations draining significant electricity resources, it faces opposition from local experts who fear unintended consequences. Free software activist Luis Benitez warns against stifling legitimate crypto activities and suggests a more nuanced approach that promotes energy-efficient mining and technological innovation.
The proposed law has already sparked debate, with crypto enthusiasts mobilizing against it and calling for public hearings to explore alternative regulatory solutions.