# Paraguay Mining Ban Controversy: Illegal Mining Farms are "consuming" the entire country's electricity

The Paraguayan Congress is now a bit overwhelmed. Last week, they submitted a bill intending to temporarily ban all cryptocurrency Mining activities—the ban covers Mining Farm installations, token creation, wallet storage, and everything in between. The reason is quite straightforward: **illegal Mining Farms are stealing electricity and causing grid failures**.

The numbers are a bit scary. Since February of this year, there have been more than 50 power outage incidents in the southeastern Alto Paraná region (near the borders of Brazil and Argentina), all due to someone secretly connecting to the grid for Mining. The national electricity company ANDE estimates that each illegal Mining Farm can cause a loss of about $94,900, and the total loss in the Alto Paraná region may reach **$60 million** in a year.

Why are so many miners flocking to Paraguay? What else could it be—**electricity is cheaper than friends**. Two-thirds of Paraguay's electricity comes from the Itaipú Dam (the third largest hydroelectric power station in the world), and the electricity prices are what miners in other countries dream of. As a result, this favorable situation has turned into a problem—illegal Mining Farms are flooding in, completely disregarding the electricity carrying capacity.

The bill is valid for 180 days (around six months), or until Congress passes formal cryptocurrency regulations, and ANDE ensures stable power supply. The real intention of the Paraguayan government is: **instead of banning it, it is better to manage it well**. The wording of the bill mentions that the lack of a regulatory framework has led to a host of issues such as unprotected consumer rights, money laundering risks, and tax loopholes.

Interestingly, Paraguay almost legalized the cryptocurrency industry in 2022, but it was vetoed by the then-president—citing concerns that the high energy consumption of Mining would hinder the country's green energy strategy. It now seems that their initial concerns have indeed become a real issue.

This matter is a bit enlightening for global miners: no matter how cheap the electricity is, if it comes from non-compliant and illegal sources, in the end, you will still have to pay the price.