Bitcoin at risk in Costa Rica and Paraguay
Costa Rica discusses a bill to restrict the use of bitcoin in daily transactions. While Paraguay could prohibit mining due to the high electricity consumption that affects the service in the country
Two American countries could ban Bitcoin. Costa Rica will propose a bill that restricts the use of cryptocurrency in daily transactions and Paraguay is in favor of eliminating the mining of this digital currency, since the high consumption of electrical energy affects the service to the population.
Bitcoin at risk in Costa Rica
In the case of Costa Rica, according to Cointelegraph, representative Johana Obando Bonilla has highlighted the introduction two years ago in the National Assembly of a comprehensive bill to legitimize the use of cryptocurrencies in the country.
Recently, discussions have advanced about limiting the ability of Costa Ricans to freely use cryptocurrency as a means of payment for daily transactions.
The controls would be focused on aspects such as “the integration of standard know-your-customer (KYC) and anti-money laundering (AML) controls by companies in the sector.”
Although Congresswoman Obando has emphasized the need for a legal framework that provides security and prevents money laundering, she has also warned that the new regulation could encourage the emergence of a clandestine market.
The Central American country seeks to establish the rules “for the exercise of activities related to the new class of assets”, as well as the “guidelines for the use and taxation of mining, marketing, custody, payments and other activities with digital currencies.”
Paraguay wants to limit bitcoin mining
Authorities in the country are weighing the consumption of electrical energy from BTC mining and how it affects the service to the population. In this sense, on April 4, legislators introduced a bill arguing that bitcoin mining steals energy and interrupts electrical service.
Although the restriction could cause the country to lose more than USD 200 million annually, if approved “it will last 180 days or until new laws are enacted and the national electricity grid operator can guarantee that it supplies enough energy.”
According to Hashlabs Mining co-founder and chief mining strategist Jaran Mellerud, “banning bitcoin mining could cost Paraguay more than $200 million a year, assuming the country has 500 megawatts of legal miners paying $0.05 per kilowatt-hour in operating expenses.”
Regarding electricity consumption, it is alleged that the Itaipú dam is the favorite place for mining, “since it supplies all of Paraguay’s local electricity needs and leaves a large surplus that can be used.”
In fact, the surplus produced by the dam “has been exported to Brazil at low prices. However, Mellerud noted that a wave of bitcoin miners has flocked to such electricity, paying slightly higher prices in recent months.
The legislators argue that since February, they have counted 50 electricity supply interruptions related to the illegal exploitation of these sources of electricity for BTC mining. On the subject, the National Electricity Administration of Paraguay “estimates that each cryptocurrency mining operation has caused damage and losses of up to USD 94,900 and that the total annual losses in the Alto Paraná area – where the Itaipú power plant is located – could amount to USD 60 million.”
M.Pino
With information from Cointelegraph and Diariobitcoin
(Reference image source: Michael Förtsch in Unsplash)
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