Paraguay have announced they will be following El Salvador’s lead and legislate Bitcoin as legal tender in 2022.
Paraguay is joint owner of the Itapu hydro-electric dam – the second largest hydroelectric dam in the world. In the period 2010-2019, Itapu maintained the highest average annual hydroelectric production world wide. It also produces electricity 55% cheaper than other dams in the region.
About 85% of Paraguay’s share of power is excess energy and currently sold to Brazil as part of the 50 year Treaty of Itapu signed in 1973.
**The treaty is up for renegotiation in 2023.**
Many Paraguayans are unhappy with the treaty which sets the price will below market value. According to one article, the agreement may have cost Paraguay $75.5 billion in lost income (article linked below).
If Paraguay decide to put this energy to work mining Bitcoin, it would:
1. be a giant economic windfall for Paraguay,
2. probably see Paraguay take China‘s place as top Bitcoin mining region
3. shut down the “bitcoin is bad for the environment” as no fossil fuels are burnt and the mining uses excess energy.
Interesting times ahead.