In a surprising turn of events, Paraguayan senators have paused progress on a proposed cryptocurrency mining ban, opting instead to explore the sector's potential benefits. Introduced last week, the ban aimed to address the issue of illegal mines disrupting the country's electricity supply.

However, a public debate scheduled for April 23 will weigh the pros and cons of Bitcoin mining in Paraguay, signaling a significant shift in legislative sentiment towards the cryptocurrency industry.

Senator Lilian Samaniego confirmed the upcoming debate during an April 10 senate session, marking a departure from the stance taken just a week prior. The initial draft law, introduced on April 4, sought to impose a 180-day moratorium on Bitcoin mining amid reports of power theft by illegal operations.

Yet, the narrative quickly changed as lawmakers recognized the potential economic advantages of selling excess energy from the Itaipu hydropower plant to cryptocurrency miners instead of exporting it at lower rates to neighboring countries.

In a letter to Congress on April 8, Senator Salyn Buzarquis highlighted the financial incentives of embracing Bitcoin mining. He noted that the 45 licensed cryptocurrency miners will generate $48 million for the National Electricity Administration (ANDE) by 2024 and expect to hit $125 million by 2025.

That would offer a lucrative revenue stream for ANDE and introduce a substantial net profit margin and additional tax revenues for the treasury. Buzarquis argued that such an influx of funds could prevent ANDE from bankruptcy and support further infrastructure investments without increasing rates for Paraguayans.

The comparison of energy selling prices further underscores the economic rationale behind the senators' reconsideration.

"Paraguay currently sells energy to Brazil at a subsidized $10/ MWh rate," Buzarquis noted, contrasting sharply with the potential $40/MWh rate for selling excess energy to local Bitcoin miners. This disparity has led to a broader discussion on the strategic use of Paraguay's energy surplus, emphasizing the need to maximize national benefits.

The debate over cryptocurrency mining in Paraguay is unfolding against the backdrop of the upcoming Bitcoin halving event on April 20, which will halve miner rewards. This global industry milestone adds another layer of urgency to the discussions, as it could significantly impact the profitability and operational dynamics of mining operations in the country.

As Paraguay navigates this complex issue, the outcome of the April 23 public hearing could set a precedent for how nations with abundant renewable energy resources engage with the burgeoning cryptocurrency mining industry.