Paraguay is inching closer to legalizing Bitcoin (BTC) and crypto mining – and potentially opening up its huge hydroelectric power capacity to industrial miners – with more senators lending their support to a key proposal.
The bill has been in the pipelines for several months, and was the brainchild of a group of miners, as well as the MP Carlos Rejala.
Rejala started tweeting about the bill at around the same time as the El Salvador President Nayib Bukele announced his decision to make BTC legal tender alongside the USD. The MP, of the minority Hagamos Party, had stoked international interest by promising that the bill would contain bitcoin-themed “surprises.” When the bill eventually materialized, most observers hoping for an El Salvador-like move were underwhelmed, with one calling it a “huge nothing burger.”
Although the bill proposes regulating the Bitcoin and crypto mining industry along fairly conservative lines, it would – if passed – potentially have an impact on domestic miners hoping to woo international partners.
Currently, a large amount of surplus energy is generated by hydroelectric plants in Itaipú and Yaciretá, and the bill, if passed, would allow miners to move into data centers near these plants and make use of abundant sources of clean energy.
River speeds at the Itaipú and Yaciretá dams are high, and the areas are famous for their powerful waterfalls.
Advocates have claimed that allowing miners to move in would allow the proponents of cleaner BTC mining solutions to take another step away from fossil fuels.
The bill appears to have gained some traction in the Senate. First, Rejala found an ally in Fernando Silva Facetti, a well-respected figure in the Paraguayan Senate. And Facetti’s involvement appears to have swayed others. Fellow senators Tony Apuril and Juan Bartolomé “Ancho” Ramírez have expressed their support for the bill, and the matter was tabled for debate for the first time in the Senate on December 2, Ultima Hora reported.
And although Silva Facetti conceded that the debate could well be pushed back by as much as a week due to other Senate matters, it appears that the bill will have its time in the upper house in the coming days.
Silva Facetti was quoted as noting that the bill was “very innovative,” and pointed out that “digital mining is already a reality,” as it is “being carried out actively in Paraguay.”
Current mining efforts are relatively small in scale, however. The new bill, the senator and his allies, feel, could change that.
He called on lawmakers to foster mining as a “new industry sector” for the country, and was quoted as saying:
“[Crypto mining] makes use of special machinery such as data processors. It could well be compared to an electro-intensive industry, because a large amount of electrical energy is consumed in the process. You also need a specialized labor force.”
This, he added, all “generates a final product that can be marketed” – namely cryptoassets. These, he said, “acquire visibility in the market, as if they were just another commodity.”
He noted that the move would allow crypto and mining to “cease from operating” in the “grey area” they currently exist in.
And the senator explained the need to act thusly:
“There are firms that have registered [with the government] as data centers, but they are [actually] digital miners. This is how they justify their electricity consumption rates.”