Government-Led Bitcoin Mining Program Launches in Paraguay

ASUNCION (Azat TV) – Paraguay’s state electricity utility, Administración Nacional de Electricidad (ANDE), has formally partnered with cryptocurrency infrastructure firm Morphware to launch the nation’s first government-led Bitcoin mining program. This landmark initiative aims to repurpose thousands of Bitcoin mining machines previously seized from illegal operations, deploying them at state-controlled sites to monetize Paraguay’s vast surplus of hydroelectric power.

The Memorandum of Understanding (MoU) between ANDE and Morphware, signed on March 4, 2026, marks a significant shift in Paraguay’s approach to digital assets. Instead of merely hosting private mining operations, the government is now directly entering the sector, with a clear focus on transforming underutilized energy into a new domestic revenue stream. The pilot phase of the program is expected to deploy approximately 1,500 confiscated miners at ANDE-controlled facilities located near existing electrical substations.

The State-Led Mining Initiative

The core of this new program is to leverage Paraguay’s abundant hydroelectric resources, much of which is currently exported at low rates. By channeling this surplus energy into Bitcoin mining, the government seeks to generate higher value domestically. Morphware will serve as a technical and advisory partner, providing operational guidance, training, and expertise to ANDE staff, who reportedly have no prior experience in Bitcoin mining.

Kenso Trabing, founder and CEO of Morphware, highlighted the straightforward economic logic behind the move. “When you do the math, it’s so simple,” Trabing told Bitcoin Magazine. “You’re selling electricity for a fraction of what it can earn if you use it locally.” This strategy aims to create a new, compliant revenue engine for the country, moving away from the previous model where illegal operators often exploited the grid.

Repurposing Seized Bitcoin Mining Assets

A critical component of the program involves the redeployment of Bitcoin mining machines seized by Paraguayan authorities. Over recent years, the rapid influx of private miners to Paraguay, attracted by its low-cost power, led to widespread electricity theft and tariff fraud. Enforcement actions resulted in the confiscation of tens of thousands of machines, with estimates suggesting the government holds around 30,000 idle units.

Trabing described government warehouses ‘literally stacked to the ceiling’ with these seized machines. Rather than letting them sit idle, Morphware’s proposal, now formalized, is to put these assets back into productive use under strict government oversight. The initial 1,500 miners will be installed at existing utility structures that can be affordably retrofitted with necessary ventilation, transformers, and metering equipment, ensuring compliance and direct control by ANDE. “This is about regulated, utility-controlled sites. Not people hiding in the countryside,” Trabing emphasized, according to Blockonomi.

Economic Strategy and Future Outlook

Discussions are ongoing among various Paraguayan government agencies regarding the management of the Bitcoin generated by the program. Options range from immediate liquidation to fund public services like social security, education, and infrastructure, to holding some Bitcoin or utilizing financial derivatives to mitigate price volatility. Morphware has recommended a conservative strategy involving the sale of BTC futures on U.S. exchanges to stabilize revenue and reduce exposure to market swings.

The advisory firm also cautioned against direct government custody of Bitcoin, citing Paraguay’s history of cybersecurity breaches, including a ransomware attack that compromised multiple government ministries. The broader vision for this initiative extends beyond Bitcoin mining, with Trabing suggesting it could reshape global energy utilities. He envisions a future where grids not only deliver power but also hold a stake in the digital infrastructure they enable, potentially integrating with the global AI economy by providing high-density compute infrastructure. If successful, the pilot could scale using structured financial products tied to future Bitcoin production, as reported by Bitcoinist.

The launch of Paraguay’s government-led Bitcoin mining program, leveraging seized equipment and abundant hydroelectric power, represents a significant policy shift from passive hosting to active state participation in the digital economy. This move reflects a growing global trend among energy-rich nations to directly monetize their resources through compute-intensive operations, while simultaneously addressing issues of energy theft and regulatory oversight.