Paraguay may not yet be a leader in blockchain adoption across Latin America, but its unique energy advantages and growing legislative interest are positioning it as a promising frontier for cryptocurrency mining. With abundant, low-cost hydroelectric power and a government increasingly engaged in shaping crypto policy, the country is attracting attention from international investors and blockchain innovators alike.
While the broader ecosystem remains underdeveloped compared to regional peers like Brazil or Argentina, targeted initiatives are laying the groundwork for transformation. Among the most ambitious is the Golden Goose Project, launched by the Commons Foundation, aiming to build the world’s largest crypto mining center on a 200,000-square-meter site powered by energy from the Itaipu Dam—one of the largest hydroelectric plants globally.
This project symbolizes Paraguay’s potential to leverage renewable energy for industrial-scale blockchain operations, setting a precedent for sustainable mining in South America.
Growing Blockchain Infrastructure and Use Cases
Despite limited regulatory clarity, Paraguay hosts several organizations actively advancing blockchain technology and digital literacy. Groups such as Cripex, Gobit SA, Signatura.co, Casa Bitcoin, and Bitcoineta run educational programs and technical projects that promote decentralized technologies.
One notable government-backed pilot program uses blockchain to trace the origin of domestically produced meat—a move that highlights the practical application of distributed ledger technology in supply chain transparency. Though still in early stages, this initiative signals openness to innovation within public institutions.
However, formal cryptocurrency regulation remains absent. In May 2019, the Paraguayan Central Bank (PCB) issued a statement reaffirming the guaraní as the sole legal tender and warning citizens about the risks of using digital assets. Yet, recent legislative efforts suggest a shift toward embracing rather than resisting crypto innovation.
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Legislative Momentum: A Step Toward Regulation
In June 2025, Paraguay’s legislature approved a bill designed to establish a tax and regulatory framework for cryptocurrency mining and trading. The proposal aimed to formalize operations for mining enterprises, attract foreign investment, and position Paraguay as a regional crypto hub—mirroring moves made by El Salvador and Venezuela.
However, in August 2025, President Mario Abdo Benítez—himself a former computer scientist and university professor, and co-founder of the Paraguayan Blockchain Association—vetoed the bill. Citing advice from ANDE (National Electricity Administration), MIC (Ministry of Industry and Commerce), and PCB, he argued that the legislation primarily benefited large industrial miners while offering no protections or incentives for small-scale or home-based operators.
He criticized lawmakers for consulting only major mining firms in haste, without addressing broader energy or tax policy implications. “The law reduces costs for industrial [crypto] miners,” he stated, “but fails amateur, household, or DIY miners.”
Despite the veto, the bill was sent back to Congress. If both chambers reapprove it with an absolute majority, it can become law regardless of presidential opposition. This ongoing debate reflects a nation at a crossroads—balancing economic opportunity with equitable access and sustainable development.
Alternative proposals are also under discussion:
- One suggests requiring miners to pay electricity bills in advance in U.S. dollars.
- Another advocates redirecting energy surplus toward subsidizing electricity for low-income households instead of benefiting wealthy foreign investors.
Supporters argue that regulated mining could attract global companies drawn to Paraguay’s electricity rates—among the lowest in Latin America at approximately $0.05 per kWh—and its nearly 100% renewable hydropower supply.
Why Paraguay Appeals to Crypto Miners
Bitcoin mining is an energy-intensive process requiring powerful computers to validate transactions on the blockchain. For industrial miners, electricity cost is the single largest operational expense—making Paraguay’s energy profile exceptionally attractive.
As the fourth-largest net energy exporter in the world—despite being landlocked and lacking fossil fuel reserves—Paraguay generates massive surplus power from the Itaipu and Yacyretá dams on the Paraná and Paraguay rivers. Its domestic infrastructure cannot fully utilize this output, leading to high export volumes and low local prices.
This excess has long drawn interest from international players. In 2021, Canadian mining giant Bitfarms signed a five-year lease in Paraguay and secured a renewable power purchase agreement for 10 megawatts of green hydroelectricity—a move emblematic of growing foreign confidence.
Companies operating in Paraguay benefit from:
- Minimal taxation under the so-called “regime of thirty” (10% income tax, 10% VAT, 10% personal income tax)
- No restrictions on capital outflows or dividend repatriation
- Simple registration requirements for mining businesses
These factors combine to create one of South America’s most miner-friendly environments—even in the absence of comprehensive legislation.
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From Illicit Mining to Industrial Growth
Crypto mining first gained notoriety in Paraguay in 2019 when politically connected entities were caught stealing electricity to mine Bitcoin. Since then, the sector has evolved rapidly. Today, large metal or concrete containers housing rows of ASICs (specialized Bitcoin-mining computers), cooling systems, and fans populate industrial zones across cities like Ciudad del Este, San Pedro, and Paraguarí.
Even rural towns like Villarrica, home to about 60,000 people surrounded by soy fields and cattle farms, now host multinational blockchain firms such as Future FinTech and Bitfarm. Locals estimate over 30,000 ASIC units are currently active in the area.
While profitability has decreased since the early boom years due to market fluctuations and increased competition, Villarrica remains a hotspot for mining activity. Domestic and international operators continue to expand, drawn by cheap power and regulatory leniency.
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Frequently Asked Questions
Q: Is cryptocurrency legal in Paraguay?
A: There is no specific law banning cryptocurrencies, but they are not recognized as legal tender. The central bank has issued warnings about their use, though legislative efforts are underway to regulate mining and trading.
Q: Can foreigners start a crypto mining business in Paraguay?
A: Yes. Foreign investors can register mining companies easily and repatriate profits without restrictions. Combined with low taxes and electricity costs, this makes Paraguay highly appealing for international operators.
Q: Does Paraguay use renewable energy for Bitcoin mining?
A: Yes. Nearly all of Paraguay’s electricity comes from hydropower generated by the Itaipu and Yacyretá dams, making it one of the greenest energy sources for industrial mining globally.
Q: Why did the president veto the crypto mining bill?
A: President Abdo Benítez opposed the bill because it favored large industrial miners while ignoring small-scale operators and broader energy policy concerns. He called for more inclusive and sustainable legislation.
Q: How much does electricity cost for miners in Paraguay?
A: Electricity costs average around $0.05 per kWh—one of the lowest rates in South America—giving miners a significant competitive advantage.
Q: Could Bitcoin become legal tender in Paraguay?
A: While not currently legal tender, proponents of the vetoed bill have expressed intentions to introduce future legislation that would formally adopt Bitcoin alongside the guaraní, following El Salvador’s example.
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The Road Ahead
Paraguay may not lead in overall blockchain adoption today, but its combination of abundant clean energy, favorable tax conditions, and growing political engagement creates fertile ground for growth. With continued legislative refinement and inclusive policymaking, it could emerge as a model for sustainable, equitable crypto development in Latin America.
For blockchain enthusiasts and investors watching emerging markets, Paraguay offers more than just cheap power—it presents a real-time case study in how nations can harness natural resources to participate in the digital economy. As global demand for green mining solutions rises, this landlocked nation may soon find itself at the center of a technological revolution.