Paraguayan Bitcoin mining industry employs less than 400 workers

A recent report presented to the Paraguayan Congress has shed light on the minimal employment impact of the country's Bitcoin mining sector.

According to the Social Care Institute (IPS), the entire Bitcoin mining industry in Paraguay only accounts for 383 direct jobs.

Of the over 60 Bitcoin mining companies operating in the country, 66% report having zero employees, making no contributions to the national social security system.

Over 40 companies with contracts from the National Power Administration of Paraguay (ANDE) might be circumventing labor regulations, potentially operating illegally or outsourcing their labor needs.

The report indicates that these companies may employ third-party firms for their operations, resulting in no direct employment of workers.

Data reveals a stark discrepancy between the power usage of the mining companies and the number of jobs they provide, with just 1.58 jobs per megawatt (MW) of power contracted.

Nearly half of the Bitcoin mining companies contribute less than 1% of their electricity expenses to social care services, illustrating a negligible impact on the social welfare system.

The report criticises these practices, stating they are detrimental to Paraguay’s hydroelectric resources, as transnational mining companies consume large amounts of subsidised electricity without offering proportional benefits to the country.

There is a suggestion to increase the social care contributions specifically for large Bitcoin mining companies, while smaller miners could face less stringent requirements.

The document calls for a review of policies, considering "stricter measures for large consumers of such a Special Intensive Consumption Group and less drastic measures for small consumers."

The report’s findings echo the concerns raised in 2022 when former President Mario Abdo vetoed a bill that would have legalised cryptocurrency mining.

Abdo cited the "high consumption of energy, intensive use of capital, and low use of labor" as reasons for rejecting the bill, pointing out the limited economic benefits of Bitcoin (CRYPTO:BTC) mining to Paraguay.

The current debate in Paraguay focuses on whether stricter regulations should be imposed on large-scale Bitcoin mining operations to ensure fair contributions to social care and national resources.

The report has prompted lawmakers to reconsider the balance between fostering technological growth and protecting national interests in energy use and employment.

At the time of reporting, Bitcoin price was $59,274.63.