Paraguay may be on its way to becoming a powerhouse for Bitcoin mining activities.
This became clear after the Senate passed a bill to regulate crypto activities in the country on July 15.
Paraguayan lawmaker Fernando Silva Facetti, who announced the development in a post on Twitter, noted that the bill is vital for the future of crypto business in the country.
A review of the draft made available to the public indicated that the Ministry of Industry and Commerce will be tasked with overseeing cryptocurrency-related services.
Paraguay Bill Modified to Maximize Energy
Perhaps the most important of the areas covered by the bill is the energy use model in the country’s crypto mining sector.
Available data shows that the country has a surplus of almost 85% of the total electricity supply generated from Usina and Itaipu
The cost of generating this energy is also relatively affordable, especially for mining operations such as Bitcoin, which is energy intensive.
With the bill, the excess energy from these areas can now be fully tapped for crypto mining activities at a competitive price.
In the same way, the commercial parameters, technical conditions and special prices for the energy tariff of the activity related to these activities will now be defined by ANDE, a leading state-owned electrical energy company for effective administration.
Paraguay’s new law dictates that the company cannot exceed 15% of the amount charged to the rest of the industry.
Another major issue addressed by the bill is taxation. To attract miners, it required crypto companies operating in the country to be exempt from the payment of value-added tax (VAT).
However, these miners are required to pay other fees that exist for such activities in the country, reports by multiple local newspapers indicated.
Bitcoin miners are recently faced with more problems with their profitability due to the current crypto winter.