A lawmaker in Paraguay has revealed that he is planning to present legislation in Congress to adopt Bitcoin, the world’s most popular cryptocurrency.
Favoring Bitcoin Adoption
Carlitos Antonio Rejala, a deputy of the nation and a member of Congress, tweeted, “This is Paraguay July we legislate! #Bitcoin.”
He also tweeted that from July onwards, all stores of Paraguay Entertainment Group (Grupo Cinco) will begin accepting cryptocurrencies, hinting further that cryptocurrencies will play an important role in Paraguay’s economy.
An Avid Supporter Of Bitcoin
Rejala has supported the regulations after El Salvador announced that it plans to accept Bitcoin as legal tender in the country. Advocating the importance of innovation, Rajala had tweeted after El Salvador’s announcement,
“As I was saying a long time ago, our country needs to advance hand in hand with the new generation. The moment has come, our moment. This week we start with an important project to innovate Paraguay in front of the world!”
In a report by Coindesk, the Congressman has been an avid follower of Bitcoin since 2017 and has been trading in crypto since 2019. If Paraguay does adopt Bitcoin, it will be the second country after El Salvador to pass a resolution supporting the cryptocurrency as legal tender.
An Invitation To Miners
Paraguay has picked an excellent time to announce its support for Bitcoin, especially with the Chinese crackdown on the mining industry. China’s crackdown has forced miners to look for other options to set up mining operations, and Rejala has, sensing an opportunity, invited Chinese miners to set up their mining operations in Paraguay.
Two of the largest crypto miners, Huobi and BTC.TOP have already announced that they are looking for other locations to set up their operations. Founder of BTC.TOP, Jiang Zhuoer stated,
“In the long term, nearly all of Chinese crypto mining rigs will be sold overseas, as Chinese regulators crackdown on mining at home.”
Another crypto miner, Hashcow that operates ten mining farms in China, has also announced that it is stopping operations in China.
The Energy Factor
Over 70% of Bitcoin mining operations are concentrated in China. One critical factor for China’s hegemony in Bitcoin mining is the availability of cheap energy. This puts Paraguay right at the top when it comes to a suitable location for Bitcoin mining operations.
Paraguay maintains an integrated public monopoly on electricity, with hydropower making up almost 100% of the electricity in Paraguay. Paraguay is one of the largest exporters of electricity, with 90% of the total electricity generated exported. The biggest beneficiaries of Paraguay’s surplus are Argentina and Brazil.
The availability of cheap and clean electricity makes Paraguay an excellent option for setting up mining operations. Argentina too has seen a significant increase in mining operations thanks to the availability of cheap electricity. The cooler climate also plays a role, with energy-intensive mining operations looking to take advantage of cooler climates.
Expected to grow to $2.8 billion by 2024 and at a CAGR of 7%, there is more than enough room for countries to capitalize on the booming cryptocurrency hardware market.