Argentina: Argentina eliminates subsidies for cryptocurrencies and multiplies by 4 the cost of energy for miners

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Argentina’s Energy Secretary issued a legal notice on January 31 advising of the elimination of electricity subsidies for cryptocurrency miners and an increase in the cost of energy to approximately four times the energy cost previously paid by miners. The new legal notice, issued and enforced from February 1, would primarily affect consumers in the wholesale electricity market in Tierra del Fuego province, bitcoin.com reported. This province was occupied by the maximum number of miners in the country due to its favorable climatic conditions. The region has a cold climate which aids in the establishment of mining farms without intensive cooling capabilities. For the uninitiated, here is a ZebPay blog that talks about mining with the example of Bitcoin.
Energy charge for Ushuaia and Rio Grande miners increased to ARS 5,000 or $47.50 per MW/h from ARS 1,764 or $16.76 per MW/h paid just before the publication of the new legislation.
The resolution explains the reason for the energy price change as follows:
  • The booming business and profitability offered by cryptocurrency mining makes miners likely to pay the price of energy equivalent to the cost of supply.
  • On the other hand, it is also unfair that they pay the price of a residential or regular user.

The monitoring of the detection of the mining source of energy consumption is carried out at the national level. Argentinian wholesaler company Cammesa has been tasked with identifying sources that use supplied energy for cryptocurrency mining purposes. During investigations last year, the company had identified two cryptocurrency mining facilities in the area. Minors who use a home connection are very few and even difficult to identify.
Local energy companies agreed that people are mining cryptocurrency more and more due to the low cost of energy in Argentina, which is 70% subsidized by the state.
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