Paraguay’s Economic Strategy: Bitcoin Mining as Industrial Transition

Paraguay‘s Minister of Industry and Commerce, Javier Gimenez, unveiled a strategic plan to leverage the country’s energy surplus by selling it to legal Bitcoin mining operations. This initiative aims to rebuild Paraguay’s industry within three years. Gimenez emphasized the government’s commitment to providing energy to cryptocurrency miners due to their consistent demand, according to Bitcoin.com.

In a meeting with Brazilian commerce representatives, Gimenez highlighted that while Paraguay’s energy surplus could power 10,000 industries, only a few currently benefit. Thus, the government will continue supplying energy to Bitcoin miners as an interim measure. Gimenez stated that this approach aims to attract industries to Paraguay, using Bitcoin mining as a transitional phase.

Gimenez acknowledged the potential unpopularity of this strategy, noting that it faces daily criticism. However, he stressed that President Santiago Pena supports the plan. The government estimates a three-year period to transition and utilize 50% of the energy generated. Presently, only 20% of the energy from the Itaipu dam, one of the world’s largest hydroelectric power plants, is used. The surplus is partly sold to Brazil at a third of the price paid by some cryptocurrency mining companies.

Paraguay has been addressing illegal Bitcoin mining activities, recently disconnecting a farm with over 2,700 miners evading energy payments. This strategy reflects the government’s effort to formalize and capitalize on the cryptocurrency mining industry while preparing for a future industrial shift.