JAKARTA - Crypto mining operators in Paraguay were surprised by the 14% increase in electricity rates announced by the Paraguay National Energy Administration (ANDE). This move threatens the profitability and sustainability of bitcoin mining operations in the country.
The increase in tariffs has led to one of the companies planning to invest more than 400 million US Dollars (approximately IDR 6.5 trillion) in Paraguay to withdraw due to opacity in local regulations.
ADE announced an increase in electricity rates for crypto mining operations, blockchains, tokens, and data centers by 14% on June 26. This policy drew strong reactions from industry players and bitcoin support groups, with a number of elected politicians and senators criticizing the action.
Senator Salyn Buzarquis strongly criticized this move, stating that it reflects internal identity issues and contradictions in the Paraguayan government, which has the potential to affect future investments in this sector. Buzarquis insists that this action is unfair, given that these companies have invested huge capital in Paraguay.
Quoted from Bitcoin.com News, Buzarquis said, "What message? You are not welcome, go elsewhere! It kills business before a big wave of investment through domino effects is created."
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Andy Jasmin, Vice President of the Paraguay Digital Asset Mining Room, informed that this tariff increase has caused several companies to leave the country amid current instability. Jasmin said that an unnamed company had withdrawn an investment of 400 million US Dollars because they were promised tariff stability until at least 2028.
Jasmin concluded that this action shows investors that Paraguay is not a friendly country for bitcoin mining. "Because there is no legal security, contracts are not respected, there is no security for investment and there is no security to bet on this country," he said.
The increase in electricity rates dealt a heavy blow to the crypto mining industry in Paraguay, a sector that was previously considered promising for the country's economy.
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