Crypto miners in Paraguay are urging the government to reconsider the impending electricity price hike, arguing that it will harm the country’s economy and could result in losses of up to $1.5 billion.
On July 19, the Administración Nacional de Electricidad (ANDE), Paraguay’s national electricity grid operator, announced in a press conference that it would continue its planned electricity price increase for legal crypto miners.
According to ANDE, the price increase will take effect starting on August 1.
Legitimate crypto miners could go out of business
In a statement sent to Cointelegraph, Jimmy Kim, the spokesperson for the Chamber of Digital Asset Mining (Capamad), expressed disappointment in ANDE’s decision to raise costs for miners. Kim explained:
“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.”
Capamad, an industry body representing legal Paraguayan Bitcoin and altcoin miners, believes that ANDE’s price hikes will make legal crypto mining unsustainable in Paraguay. Kim says up to 70% of legitimate operators could go out of business starting in August.
The miner spokesperson also claims the event would cause thousands of direct and indirect job losses. In addition, Kim said that the event threatens over $1.5 billion in planned technology and infrastructure investments.
Miners urge electric board to reconsider price hike
On July 19, ANDE announced that its efforts to enact a law to protect the electrical system's integrity were due to crypto-mining operations that interrupted its electricity supply. The government announced more severe penalties for the illegal theft of electrical energy.
While they understand the need to take action against illegal crypto miners, Capamad urged the government to reconsider the hike for legal crypto miners. Kim said:
“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 added that over 50 companies operate legitimately and have the potential to contribute to the economy. The spokesperson claims that mining firms have already invested over $700 million, which Kim believes to be "the largest amount of foreign direct investment (FDI) the country has ever received."