Paraguay's state power utility, Administración Nacional de Electricidad (ANDE), has signed a memorandum of understanding (MoU) with U.S.-based crypto infrastructure firm Morphware to establish the country's first government-led Bitcoin mining operation. This formal cooperation framework marks a strategic shift from merely hosting private miners to the state directly evaluating and controlling a utility-based mining model as part of its national energy and digital infrastructure strategy.
The initiative is centered on two key resources: seized Bitcoin mining hardware and surplus hydropower. Paraguayan authorities currently hold approximately 30,000 confiscated ASIC miners, seized from facilities accused of electricity theft or tariff fraud. Morphware CEO Kenso Trabing described government warehouses where the machines are "literally stacked to the ceiling." The pilot phase will involve redeploying around 1,500 of these seized miners at ANDE-controlled sites near existing electrical substations, which already have the infrastructure to handle large energy loads.
The economic logic leverages Paraguay's abundant, low-cost hydroelectric power, largely generated by the Itaipu Dam. Much of this energy is currently exported, while domestic consumption remains limited. The plan aims to monetize this stranded or underutilized electricity domestically. "ANDE has unlocked a powerful new asset, and Morphware is here to turn that asset into a new revenue engine for Paraguay," stated Trabing. He framed the project as transforming "unused electricity into productive compute that serves both the Bitcoin network and the global AI economy," describing it as "the future of midstream electricity."
Under the proposed structure, ANDE will retain ownership of the mining machines and operate the sites directly. Morphware's role is primarily advisory, providing technical guidance, operational support, and training for utility staff, without direct revenue participation. This ensures the operations remain "regulated, utility-controlled sites" rather than unregulated private ventures.
Discussions are ongoing regarding how Paraguay will manage the Bitcoin output. Some officials favor selling mined BTC immediately to fund public programs, while others support holding the assets or hedging price risk. Due to cybersecurity concerns—Paraguay has experienced several major public system breaches—Morphware has advised against direct government custody of Bitcoin. Instead, the firm has proposed hedging the mining output using Bitcoin futures on U.S. exchanges.
The MoU, signed in Asunción, creates an "official path" for technical evaluation and project development under Paraguay's legal and regulatory framework. This agreement signals a broader policy shift, positioning Bitcoin mining as a strategic domestic revenue engine that utilizes state-controlled infrastructure and seized assets.
