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Paraguay now requires all Bitcoin miners to register with the state as authorities tighten oversight and crack down on illegal operations

 

Bitcoin miners in Paraguay could now be facing tighter control as the government moves to enforce new registration rules. 

Paraguay Bitcoin mining has grown fast due to cheap hydro power, and authorities now want clear records of who mines and where the power flows.

Paraguay Bitcoin mining rules bring mandatory registration

Paraguay Bitcoin mining stands at the centre of new government action. The Chamber of Deputies recently approved two resolutions that require miners to register with the state before continuing operations. 

Deputy María Constancia Benítez presented the measures, in which the Ministry of Industry and Commerce must submit reports on all registered miners. 

These reports must also include background details in physical and digital form.

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Under the new specifications, the National Electricity Administration (known as ANDE) must deliver a full list of approved power connections, and each entry must show names of responsible parties and exact locations. 

In all, both agencies have 15 days to send the data in.

Paraguay’s new Bitcoin mining rules were put in place to stop illegal farms. Authorities found more than 30 hidden operations last year alone, and Police seized large volumes of equipment. 

Lawmakers also passed a law that allows prison terms of up to 10 years for any cases of illegal mining.

Bitcoin mining in Paraguay uses surplus hydroelectric power

Paraguayan Bitcoin mining has grown over the years because the country produces more electricity than it needs, mostly from its hydropower plants.

Paraguay also exports about 90% of its power to Brazil and Argentina at low prices. However, Bitcoin mining changed that equation because miners pay higher rates than neighbouring countries.

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ANDE now earns around $12 million each month from mining operations, and this revenue adds support to national energy budgets.

Bitcoin mining also places pressure on the grid. Because of this, authorities want to balance export contracts and local supply. The recent registration requirement would thus help the state track real usage and prevent overloads.

Changes in global hashrate

Paraguay’s Bitcoin mining currently holds a strong place on the global map. The country currently ranks fourth in worldwide Bitcoin hashrate, and controls about 3.9% of the total computational power.

The United States leads the global list with Russia and China following closely. Paraguay has also moved ahead of many larger economies due to its energy advantage.

This growth has attracted both local and foreign companies. However, the speed of expansion also created multiple blind spots that the country is now attempting to patch. 

Paraguayan authorities say that before now, unregistered farms operated without grid approval and their illegal connections damaged infrastructure in several regions.

This registration requirement now gives authorities oversight and allows them to map operations or grid demand. 

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Bitcoin mining compared to other countries’ rules

The recent registration requirements are similar to rules in other major mining hubs. Kazakhstan passed its Law on Digital Assets in 2023, and that law requires miners to obtain licenses and register hardware and software.

Kazakhstan also forces miners to sell part of their mined Bitcoin through licensed exchanges. 

Russia is another example. The country requires registration through the Ministry of Digital Development, and requires miners to report wallet addresses and production numbers to the Federal Financial Monitoring Service. 

In all, only small home miners can avoid registration if they stay under energy limits.

Over in the United States the rules can vary by state. For example, New York placed temporary limits on new facilities due to environmental concerns and Texas openly welcomes miners, even offering them grid partnerships.

Canada follows a provincial system, while Quebec paused new mining projects for a short period and British Columbia continues to accept new mining firms under clear energy rules.

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