- Crypto miners in Argentina face a significant rise in energy costs as the Ministry of Economy sets a new rate.
- Residential energy costs are heavily subsidized, with households enjoying rates starting at just under $11.30 per MWh.
- The new energy rate for miners comes into effect on August 1 and will run until October 31, 2023, potentially hindering the activities of local miners in the country.
According to Livecoins, the Ministry of Energy has set miners a new rate of 17,240 Argentine pesos (approximately $63.30 at the time of writing) per megawatt-hour (MWh), the highest band on the ministry’s scale.
On the other hand, residential energy costs are heavily subsidized, with households eligible for subsidies of up to 70%. Residential rates begin at slightly less than $11.30 per MWh.
The rate increase places cryptocurrency mining in the same price bracket as heavy industries and above the levels paid by commercial enterprises.
The new rates will come to effect on August 1 and will remain active until October 31, 2023, when they could be changed again.
Different electricity rates for cryptocurrency miners are a relatively new phenomenon in Argentina. However, their arrival has caused upheaval: miners have been grappling with spiraling energy costs for more than a year.
The ministry announced in early 2022 that it would remove miners’ access to subsidized electricity, raising the price of 1 MWh of power for miners from just under $17 to nearly $48.
According to the media outlet, the new increase to more than $63/MWh “may impede the activities of local miners.”
Livecoin stated: “The new measures mean everyone who [mines crypto] in the country is now under pressure.”
The Argentine government published an official definition of mining and announced a new mining policy on January 31, 2022.
According to the government, “The consumption of electricity by the cryptocurrency mining sector [is] characterized by its intensity and consistency, both hourly and seasonally. [The] emergence [of crypto mining] poses challenges to the infrastructure of the grids in which [miners operate].”
According to power companies, they have been attempting to monitor crypto miners on a “national level.” And the companies have already had some success in shutting down large-scale illegal crypto-mining farms. However, they have previously admitted that smaller-scale “home connection” miners are much “harder to identify.”
Meanwhile, a leading lawmaker has proposed that Argentina adopt Bitcoin (BTC) rather than follow dollarization plans.