Paraguay’s president, Mario Abdo Benítez, vetoed a bill that would have recognized cryptocurrency mining as an industrial activity. He claimed that mining’s high electricity consumption could hinder the growth of a sustainable national industry.
The bill was approved by the nation’s Senate in July as low-energy costs continue to boost mining activities in the country.
The order states that cryptocurrency mining using human labor is less capital-intensive and therefore does not create added value compared to other types of industrial activity. Globally, digital currency is one of the biggest job creators. LinkedIn’s economic graph shows that crypto and blockchain job listings in the US will grow 615% in 2021 compared to 2020.
According to the bill’s sponsor, Senator Fernando Silva, a law aimed at promoting the cryptographic mine using excess electricity, but the Paraguayan government has decided to boycott operations:
The Paraguayan Senate approved the project on July 14 and recognized the cryptographic mine as an industrial action. They set up 15 % of the economic activity rate, but these instructions indirectly encourage the industry. says:
“By subordinating the rate applicable to the users of crypto miners to just a small percentage above the current industrial rate, an indirect industrial incentive would be offered to crypto mining.”
According to the document, during the last twelve months, industrial investment in the country increased by 220 percent to $319 million, and GDP grew by more than 4 percent during the last five years. If this rate continues, all the energy produced and available in the country may be needed to support the national industry.
The Senate-passed bill would require miners to apply for permits and licenses to use industrial energy. It also established the Ministry of Industry and Commerce as the primary law enforcement authority and the Secretariat for the Prevention of Money or Asset Laundering to supervise crypto investment companies.
Low electricity costs in Paraguay have encouraged local and foreign companies to build mining infrastructure in the country starting in 2020. In December 2021, household electricity costs were $0.058 per kWh and business electricity costs were $0.049 per kWh, according to global petrol prices reports.
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