Lawmakers in Paraguay have introduced a bill aimed at temporarily curbing the energy-intensive crypto mining industry. The proposed legislation states that the creation, storage, and commercialization of virtual assets, cryptocurrencies and crypto mining farms on Paraguayan soil will be temporarily prohibited.
This is due to the country’s rising temperatures, which increased electricity demand and pushed the country’s power grid to its limits. The Paraguayan government has identified illegal cryptocurrency mining farms as large energy users, exacerbating the power crisis.
The bill suggests implementing the ban for 180 days or until a proper regulatory framework is established. It also highlights the need for Paraguay’s National Electricity Administration (ANDE) to ensure sufficient infrastructure exists to support crypto mining while safeguarding the stability of the power grid. Violations of the proposed law would be subject to sanctions as per the regulations governing the national financial system, the Central Bank of Paraguay, and the penal code, along with other applicable administrative penalties.
However, the bill’s broad language raises concerns about unintended consequences. Activities like crypto staking, which involve creating virtual assets, and even holding digital assets in wallets, could inadvertently be outlawed.