More than 50 Bitcoin mining companies will migrate from Paraguay

At least 55 Bitcoin mining companies currently operating in Paraguay say they would migrate to other countries if electricity rates for this sector continue to rise.

This is the warning issued by Juan José Benítez, president of the Paraguayan Chamber of Digital Asset Mining (Capamad), who spoke with CriptoNoticias on what the future of the digital mining industry will be like in that country following the tariff increase.

According to Benítez, the 55 legal companies that are in the public line “will begin to shut down their operations, close the companies and leave the country” if the government of Paraguay and the National Electricity Administration (ANDE) maintain the new energy prices.

The specialist explained that all these companies suffered an increase in electricity rates of up to 16%This means an increase of USD 8.5, reaching a new rate of up to USD 66 dollars for each megawatt/hour consumed.

As CriptoNoticias reported on June 28, ANDE established new rates for the three groups of consumers in which Bitcoin miners are profiled, that is, Very High Voltage (220 kV), High Voltage (66 kV) and Medium Voltage (23 kV).

If these companies leave, in addition to damaging the country’s image by scaring away investments and companies, the departure of the miners “implies a hard blow to the Paraguayan economy.” This, taking into account that There will be at least 1,200 layoffs, according to Benítez’s calculations.

“Contrary to President Santiago Peña’s message, who promised 500,000 new jobs, with the closure of these companies we are talking about at least 1,200 people who will go from having a formal job with all the benefits to being unemployed due to a government decision.”

Juanjo Benítez Rickmann, president of Capamad.

$1.5 billion to be lost

The businessman recalled that with the increase in the tariff, ANDE is putting at risk a direct investment of USD 1.5 billion for Paraguay. In addition, several companies that have already made multimillion-dollar investments “will see that the return on investment will be postponed and their business plan will have to be significantly modified.”

“I am sure that these companies will not continue with their plans for growth and expansion,” he warned. “They will choose other, more serious destinations, which guarantee legal security and in which the agreed terms are fulfilled,” he said.

Benítez stressed that with the increase in the ANDE rate, Paraguay is competing with other countries where electricity is more expensive, such as the United States, which has a rate of USD 40 for each megawatt/hour consumed. A “completely unviable price for digital asset mining.”

The executive director of the company Digital Assets, dedicated to Bitcoin mining in Paraguay, also expressed his expectation that the national government and ANDE “rectify the resolution.”

He argues that Capamad is in talks with the authorities of the Ministry of Industry and Commerce, as well as the ANDE, “looking for solutions.” “And we are convinced that the situation will be reversed as soon as possible,” he added.

The situation with legal Bitcoin miners in Paraguay has even led politicians to intervene. Senator Salyn Buzarquis is one of the staunchest critics of the measure. For him, ANDE and the government steal from miners by increasing rates.

In a video posted on social media last week, Buzarquis questioned the government’s increase in energy prices for miners, who pay up to four times more for this resource compared to other buyers, such as Argentina and Brazil.

“ANDE has suddenly raised the energy tariff by up to 16%, which is making business unviable for mining companies in a deceitful and unfair manner. It is changing the rules of the game after these companies have invested a huge amount of capital in the country,” Buzarquis repudiated at the time.