Paraguay’s President Crushes Bitcoin and Crypto Mining Bill with ‘Total Veto’

Paraguayan President Mario Abdo Benítez has spectacularly rejected a much-lauded bill that would have legalized and regulated Bitcoin (BTC) and crypto mining in the Latin American country.

As reported, the ambitious bill began as a private member’s proposal in the House of Commons and was formulated in collaboration with domestic miners who want to use surplus electrical energy produced by hydroelectric power stations. It was eventually taken up by the Senate, where it was championed by Senator Fernando Silva Facetti.

The Senate then approved the bill, as did the House of Commons. But it seems to have fallen at the very last hurdle, with Benítez unhappy about how crypto mining’s power consumption could affect sustainability in the long run.

Benítez, per Portalo de Bitcoin, decided that crypto mining “requires a high level of power consumption that could compromise the development and expansion of an inclusive and sustainable national industry.” The decree, which the president noted had been made after taking advice from the nation’s central bank, also noted the fact that mining makes “intensive use of capital and low use of labor” and “as such does not generate added value” to the economy.

Earlier this month Cryptonews.com reported that the bill had drawn criticism from many politicians, some of whom claimed that the bill had been rushed.

Others still repeated all-too-familiar claims about mining’s alleged high carbon footprint. International miners have stated that they will agree to set up shop in Paraguay provided they are offered special, low electricity rates.

The same critics also argued that Paraguay has very little to gain by giving international miners access to Paraguayan power—and that few domestic jobs would be created as a result.

This argument seems to have swayed Benítez.

But a furious Silva Facetti took to Twitter to criticize the president’s decision – which he called a “total veto”. The senator argued that the veto made little sense considering the large number of miners already operating in the country.

The senator wrote that the executive branch of government was guilty of “ignoring the existence” of miners, who must now “labor in the shadow of regulations.”

The senator wrote that the president had “washed his hands of” mining, forcing it to “operate in a gray area, unable to enjoy access to the financial system or build in investor protection guarantees.”

He added that Benítez had shown a “lack of vision” in his decision to oppose and had “destroyed the possibility of the arrival of new investors” – in addition to paralyzing the hopes of “hundreds of small and medium-sized” domestic companies that “live and be dependent on this industry.”

Worse, Silva Facetti warned, the move would mean that instead of using the surplus energy to drive economic growth, Paraguay would have to hand over its excess power to neighbors Argentina and Brazil.

According to bilateral agreements Paraguay has signed with both Argentina and Brazil, Paraguay must donate all the energy it generates at hydroelectric plants on rivers bordering the nations if it is unable to either use or sell this electrical power.

Proponents of the bill have pointed to the fact that Paraguay’s infrastructure is set up to consume fossil fuels, rather than hydropower – meaning that 10% of the country’s hydropower is “unusable” in the nation. As such, failing to use the power – by allowing miners to buy it – will simply strengthen the economies of Argentina and Brazil at Paraguay’s expense.

Several Chinese and East Asian players were reportedly waiting for confirmation of the bill before making final decisions about moving to the country. However, others have already established themselves in the country – and will probably now have to operate in a “grey” unregulated area.
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