On Monday, Mario Abdo Bentez, the President of Paraguay, rejected a bill that attempted to classify crypto mining as an economic endeavor. He reasoned that the development of a nationally sustainable business may be hampered by mining’s high power usage.
The official Twitter handle of the President of Paraguay tweeted the decree. It cited massive energy usage and very meager employment benefits as reasons for the rejection. The decree also states that crypto mining is a heavily capital-centric process with little human labor. For this reason, the decree states that this would create less value in comparison to other industries.
Paraguayan President believes that crypto mining is energy-centric
The introduction of the bill was due to reportedly more energy production than consumption. Senator Fernando Silva Facetti, the bill’s proponent, claimed that the goal of the measure was to encourage cryptocurrency mining by utilizing excess power and electricity.
But the move by the Paraguayan President outright vetoed the bill that would have recognized cryptocurrency mining as a legal activity.
Facetti also wrote in this tweet thread that the President does not accept crypto mining as an industry that generates resources and a lot of work.
“Paraguayan President opposes the regulation of a sector that asks to be controlled and destroys the possibility of the arrival of new investors. And also the formalization of hundreds of small and medium-sized companies that live in and depend on this industry.”
The decree also states that there has been a visible industrial investment growth of 220%. This performance in the last 12 months has lifted the investment to $319 million. To maintain sustainability, the country might need to utilize the total energy produced in the country.
The intense implementation of crypto mining will put the country in a position to import electricity, says the decree. Since 2020, local and multinational businesses have been installing mining infrastructure in Paraguay due to the country’s cheap energy prices.
The current decision by the President will demotivate cryptocurrency mining in the country.