Cryptocurrency miners in Paraguay are urging the government to reconsider an impending electricity price hike, which they claim could hurt the country’s economy and result in losses of up to $1.5 billion.
On July 19, Paraguay’s national power grid operator, Administración Nacional de Electricidad (ANDE), announced in a press conference that it would continue to increase electricity prices for legitimate cryptocurrency miners.
According to ANDE, the price increase will take effect from August 1.
Legitimate cryptocurrency mining operations may go out of business.
In a statement to Cointelegraph, Jimmy Kim, a spokesperson for the Chamber of Digital Asset Mining (CAPAMAD), expressed disappointment with ANDE’s decision to raise miner fees. Kim explained:
“We are extremely disappointed that Paraguay’s National Electricity Commission, ANDE, has confirmed that starting August 1, electricity prices for legal cryptocurrency miners in the country will increase by up to 16%. This follows a 54% rate increase in 2022, when miners begin signing new five-year contracts with ANDE.”
Capamad, an industry group representing legitimate Paraguayan Bitcoin and altcoin miners, believes that ANDE’s price hike will make legal cryptocurrency mining unsustainable in Paraguay. Kim says up to 70% of legitimate operators could go out of business starting in August.
The miners’ spokesman also claims that the incident will result in the loss of thousands of direct and indirect jobs. In addition, Kim said the incident threatens more than $1.5 billion in planned technology and infrastructure investments.
Related: Paraguay Announces Temporary Ban on Cryptocurrency Mining as Illegal ‘Farms’ Cripple Power Grid
Miners urge electricity board to reconsider price hike
On July 19, ANDE announced that efforts to enact legislation to protect the integrity of the electricity system were due to cryptocurrency mining operations that had caused power outages. The government announced harsher penalties for illegal electricity theft.
While he understands that action is needed against illegal cryptocurrency miners, Capamad urged the government to reconsider its stance on legitimate cryptocurrency miners. Kim said:
“Our members now face difficult decisions about how to cover their income. We urge ANDE to urgently review the planned increase to protect this vital source of income for the Paraguayan economy.”
Kim added that more than 50 companies are legally operating and have the potential to contribute to the economy. The spokesman claims that mining companies have already invested more than $700 million, which Kim believes is “the largest amount of foreign direct investment (FDI) the country has ever received.”
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