The sizzling summer heat is just the tip of the melting iceberg when it comes to Paraguay’s cryptocurrency conundrum.
With temperatures soaring and air conditioners running at full speed, the nation’s power grid is struggling to keep the lights on even as demand for power surges. But hot weather isn’t the only thing that puts a strain on your system. The government says illegal cryptocurrency mining farms are consuming gigawatts like nothing happens.
To address this issue, a group of Paraguayan lawmakers introduced a bill that would temporarily slow down the power-hungry cryptocurrency mining industry by pausing all activities related to the ecosystem. And they’re not just good at talking.
“The creation, preservation, storage, commercialization of virtual assets, cryptocurrencies, or cryptocurrencies, as well as the installation of cryptocurrency mining farms, are temporarily prohibited within the territory of Paraguay.”
The bill states that the ban will last for 180 days or until an appropriate regulatory framework is established and will ensure that ANDE (National Electricity Authority of Paraguay) has sufficient infrastructure to support the energy-intensive demands of cryptocurrency mining without putting the rest of the power grid at risk. I suggest you can.
The bill’s broad language may unintentionally prohibit activities such as cryptocurrency staking. create Virtual assets — even the simple act of storing digital assets in a wallet is prohibited. save Or preserve your cryptocurrency.
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They want to ban me from generating BRC20 and holding wallets in mechanisms that use PoW.But there is something more beautiful than all this pic.twitter.com/odawHK4HMf
— Nelson 🔑 (@nelsondcg1) April 4, 2024
Violations of the proposed law constitute violations of the regulations governing the national financial system and the Central Bank of Paraguay, as well as Law No. You will be subject to sanctions in accordance with criminal offenses and other applicable administrative sanctions provided for in the “Criminal Code” No. 1160/1997.
According to the draft bill, the lack of a clear regulatory framework for the cryptocurrency ecosystem leaves the door wide open for all kinds of problems to arise, from consumer protection issues to potential criminal activities such as money laundering and tax evasion.
Despite the bill’s broad language, its ideas appear to address a very specific problem: the illegal cryptocurrency mining farms that are popping up across the country. These covert operations have taken power and circumvented existing local regulations.
Consider, for example, the recent incident where as many as 700 active ASICs were discovered at a Radio Quindii facility. This is a very large cryptocurrency mining site, so it requires as much power as the city it is located in. And this is not an isolated case, with government officials claiming that these illegal operations cost ANDE, a state-owned company, more than $60 million a year. due to loss of revenue
However, it is unclear whether the bill will become law. The content has already drawn criticism from local experts just one day after it was introduced.
For example, Luis Benitez, a free software activist deeply involved in the cryptocurrency community, explained in a lengthy Twitter thread why the proposed law could do more harm than good.
“The law does not distinguish between illegal and legitimate use of cryptocurrency assets. Regulations must be precise and protect legitimate users without stifling the potential for economic and technological growth,” he said. “It is important to consider the unintended consequences of the ban. “This could encourage illegal mining or move legal activities out of the country, resulting in loss of revenue and economic opportunities.”
1/🧵 We received a bill from a Paraguayan senator to temporarily ban cryptocurrency and cryptocurrency mining. You’re trying to solve a real problem, but is this the best way? Let’s analyze it. #CryptoRayPY
— angatupyrytau (@angatupyrytau) April 4, 2024
Benitez argued that regulating energy-intensive mining while promoting the development of energy-efficient tokens would be a more balanced approach. he said decryption Cryptocurrency enthusiasts are already coordinating action on the bill.
“The Hashpy community will mobilize again to prevent the bill from advancing,” he said. “We will request a public hearing to explain once again the alternatives Paraguay has with regard to regulating some of its cryptocurrency activities. “Suppressing technological advancement is never good for any economy.”
editor Ryan Ozawa.
