Paraguay Plans State-Run Bitcoin Mining Program

Paraguay is exploring a government-run Bitcoin mining initiative based on seized cryptocurrency mining equipment. The state-owned electricity company Administración Nacional de Electricidad (ANDE) has signed a memorandum of understanding with Morphware to develop regulated Bitcoin mining operations.

Authorities have confiscated thousands of ASIC miners during enforcement actions against illegal mining operations. Many operators had connected to the power grid without authorization. Others misclassified their activities to obtain cheaper electricity tariffs.

As a result, large quantities of mining hardware are currently stored in government warehouses. The new initiative aims to redeploy this equipment under state supervision.

The pilot phase will deploy approximately 1,500 Bitcoin mining machines at ANDE-controlled facilities. The project will utilize unused hydroelectric energy to generate new revenue streams for the national utility.

How the Mining Program Will Work

Morphware will act as a technical partner and advisor. The company will provide operational guidance and training to ANDE personnel. However, the state utility will maintain ownership and operational control of the mining infrastructure.

Mining equipment will be installed near existing electrical substations. Many utility buildings are already located next to these facilities. This allows relatively simple retrofitting.

Infrastructure upgrades include:

• installing ventilation systems
• adding power transformers
• deploying distribution units
• integrating electricity metering systems

This approach allows Paraguay to convert underused electricity into digital asset production.

Why Paraguay Is Turning to Bitcoin Mining

Paraguay produces far more electricity than it consumes domestically. Much of the surplus energy is generated by the Itaipu hydroelectric dam and exported abroad.

Bitcoin mining offers a potential way to monetize that surplus locally. At the same time, a government-controlled model could reduce illegal mining and electricity theft.

Officials are also debating how to manage the Bitcoin produced by the program. Possible strategies include:

• selling mined BTC immediately
• holding Bitcoin as a reserve asset
• hedging production using derivatives markets

Morphware recommends a conservative strategy that includes hedging through Bitcoin futures contracts.

Future Outlook

The pilot program represents the first step toward state-controlled cryptocurrency mining. If successful, Paraguay may expand the model and invest in new mining infrastructure.

Such projects could transform excess electricity into a strategic digital asset industry. The initiative also reflects a broader shift in how countries view energy exports and digital infrastructure development.

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