Paraguay might be on its way to becoming a powerhouse for Bitcoin mining activities.
This became apparent following the approval of a bill seeking to regulate crypto activities in the country by the Senate on July 15.
Announcing the development in a post on Twitter, Paraguay lawmaker, Fernando Silva Facetti, noted that the bill is vital to the future of crypto activities in the country.
A review of the draft made available to the public indicated that the Ministry of Industry and Commerce will be saddled with the supervision of cryptocurrency-related services.
Paraguay Bill Tailored to Maximise Energy
Perhaps the more significant of the areas the bill addressed is the model for energy expenditure in the country’s crypto mining sector.
Available data indicates that the country has an excess of nearly 85% of the total electricity supply generated from Usina and Itaipu
The cost of generating this energy is also relatively affordable, especially for mining activities like Bitcoin which is energy intensive.
With the bill, the excess energy from these areas can now be tapped fully for crypto mining activities at a competitive price.
By the same token, the commercial parameters, technical conditions and establish special prices for the activity’s energy tariff regarding these activities will now be defined by ANDE, a foremost state-owned electric energy company for effective administration.
Paraguay’s new law mandated that the company must not exceed 15% of the amount charged to the rest of the industry.
Another key issue addressed by the bill is taxation. To attract miners, it mandated crypto companies operating within the country to be exempted from the payment of Value Added Tax (VAT).
However, these miners are mandated to pay other fees that exist for such activities in the country, reports by multiple local newspapers indicated.
Bitcoin miners have recently been faced with increased issues dealing with their profitability due to the current crypto winter.