According to the National Power Administration, the growth of illegal Bitcoin mining operations could threaten the stability of Paraguay’s power system. According to the National Power Administration, the boom in the country is putting pressure on the power system. Many miners are illegally plugging into the network and consuming large amounts of electricity without paying any fees.

Paraguay Underground Mining Operations Grow

Paraguay’s popularity as a country with cheap power tariffs for bitcoin mining is hurting the electric grid and might work against the stability of the power system in the country. ANDE, the National Power Administration, declared on Oct. 28 that the recent boom in bitcoin mining has caused power consumption for the department of Alto Parana to grow immensely, with many operations connecting illegally to the grid.

According to Miguel Angel Baez (technical director of the ANDE organisation), this has prompted them to intensify vigilance in that area, stepping up supervision operations to detect possible connections at the border with Brazil.

Baez stated that two more operations will appear after the company has disconnected an operation. These covert operations could reportedly consume the equivalent of one apartment complex’s daily energy consumption in one day.

This situation is not unique to the region. The National Power Administration had previously cut power off to miners who were involved in power-related crimes. In Aug., Alfredo Arguello, head of the East Regional Management Division, stated that they had detected irregularities, including direct connections, bypass connections, and modified power meters, during supervision visits. The losses as a consequence of these irregularities reached $400,000 monthly.

Special Bitcoin Mining Charges

The situation in the sector prompted the National Power Administration to oppose the fee suggested in a proposed cryptocurrency bill, which established the maximum fee to be only 15% higher than what is collected from other equivalent companies. The organization indicated that it would support a veto of this law and proposed a new set power fees.

The cryptocurrency bill, which would come to bring more clarity to the bitcoin mining industry, was vetoed by president Mario Abdo on Sep. 2 on the grounds that it was an energy-intensive activity that presents little demand for labor. The veto was rejected by the Paraguayan senate on Sept. 30, with the Congress making moves to pass the bill without presidential support.

Despite this, Paraguay remains a desirable destination for bitcoin mining businesses. On Oct. 14, Pow.re, a bitcoin mining company, announced that it had started the construction of two mining facilities in the country that will manage 12 megawatts (MW) of hydroelectric power.

What do you think of the warning about the rise of underground illegal mining operations in Paraguay? Comment below.

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