A new law in Paraguay might turn the nation into a mining paradise.
On July 14, the Paraguayan Senate transmitted a bill to the President for approval that would free cryptocurrency miners from Value Added Tax and let them use extra energy (VAT). If the President signs the measure, Paraguay may be the next country that cryptocurrency mining businesses pursue. Fernando Silva Facetti, the minister of technology, information, and communication of Paraguay, praised the new law on Twitter.
Two important improvements in taxation and energy use for cryptocurrency miners are introduced by the new legislative proposal. With the power produced by its two dams, Usina and Itaipu, Paraguay can offset 85% of its entire energy use. As a result, the nation provides cheap energy. Although this helps cryptocurrency miners, the proposed measure goes a step further by giving them access to the extra electricity produced by the dams.
In other words, the already affordable power would be further discounted for cryptocurrency miners. The new bill mandates that ANDE, the state-owned energy corporation, be in charge of calculating the available energy, setting its price, and directing it to the authorized distribution locations. The new measure could be just what the mining industry needs right now. The current bear market prices have presented significant difficulties for cryptocurrency miners. Mining equipment manufactured before 2019 stopped being profitable as soon as Bitcoin dropped to the $20K levels in June. Individual miners struggled as a result, while corporate miners also had difficulties. There are several mining businesses that had to sell their assets and machinery or close down branches in order to pay the bills, and Compass Mining and Core Scientific are only two instances.