Paraguay crypto miners urge the government to reconsider proposed electricity price hikes, warning it could harm the national economy and lead to $1.5b losses.
Capamad spokesman Jimmy Kim believes that 70% of legitimate crypto miners may go out of business due to the electricity price rise scheduled for August 1.
Paraguay’s national electrical grid operator, the Administración Nacional de Electricidad (ANDE), declared in a news conference on July 19 that it will carry out its scheduled hike in electricity prices for legal cryptocurrency miners.
According to ANDE, the price rise will go into effect on August 1.
Valid cryptocurrency miners might cease operations.
Jimmy Kim, a spokesman for the Chamber of Digital Asset Mining (Capamad), voiced dissatisfaction with ANDE’s decision to increase mining prices in a statement. Kim clarified:
“We are incredibly disappointed that Paraguay’s state electricity board, ANDE, confirmed that electricity prices will increase by up to 16% for legal cryptocurrency miners in the country from Aug. 1. This follows a 54% fee hike in 2022 when miners started to sign new five-year agreements with ANDE.”
The trade association Capamad, which advocates for legitimate Bitcoin and altcoin miners in Paraguay, thinks that ANDE’s pricing increases will render legal cryptocurrency mining in the country unfeasible. According to Kim, up to 70% of lawful operators may close their doors starting in August.
A spokeswoman for the miners asserts that the incident would result in thousands of employment losses, both direct and indirect. Kim added that over $1.5 billion in planned infrastructure and technology investments are at risk due to the incident.
Miners want the electric board to reevaluate raising prices.
On July 19, ANDE declared that the reason behind its attempts to pass legislation safeguarding the electrical system’s integrity was that cryptocurrency mining operations had disrupted its electricity supply. The government announced more harsh penalties for unlawful energy theft.
Capamad encouraged the government to reevaluate the hike for legal cryptocurrency miners, even if they recognize the necessity of taking action against criminal miners. Kim stated:
“Our members are now facing difficult decisions about how to make ends meet. We call upon ANDE to urgently review the planned increase in order to protect a vital source of revenue for Paraguay’s economy.”
Kim said more than fifty businesses are legal and might boost the economy. According to the spokesman, mining companies have already invested over $700 million. Kim believes this is “the largest amount of foreign direct investment (FDI) the country has ever received.”
