Paraguay is poised to become the latest nation-state to formally integrate Bitcoin mining into its national energy strategy. In a novel initiative, the country’s state-owned electricity monopoly, the Administración Nacional de Electricidad (ANDE), has signed a Memorandum of Understanding (MoU) with infrastructure firm Morphware to launch a government-run Bitcoin mining program. The project will leverage two abundant domestic resources: thousands of confiscated mining machines and surplus hydroelectric power from the iconic Itaipú Dam.
Under the agreement, ANDE will host and own the mining operations. This represents a strategic shift for the utility, which will redirect a portion of its hydroelectric generation—otherwise exported at treaty-defined prices—into domestic Bitcoin mining facilities. Morphware, led by founder and CEO Kenso Trabing, will serve in a technical advisory capacity. “Because ANDE has no experience mining Bitcoin, our role will be an advisory one,” Trabing clarified, positioning the firm as a consultant rather than a speculative joint venture partner.
The pilot phase is designed to be immediately actionable. Approximately 1,500 seized miners will be installed at existing ANDE utility buildings adjacent to electrical substations. These sites can be retrofitted with essential infrastructure—including ventilation systems, transformers, distribution units, and precise metering—to function as basic mining facilities. This approach minimizes new construction costs and utilizes existing grid-adjacent real estate.
Seizing Background
The foundation for this program is a large stockpile of confiscated hardware. This decision follows a rigorous nationwide campaign by ANDE beginning in early 2024, targeting illegal mining operations connected via unmetered, high-voltage lines. The bulk of the machines slated for the state program were seized during intensified inspections in May and June 2024.
A prime example occurred in Salto del Guairá, where authorities confiscated 2,738 mining rigs from a single operation. That site was found to be stealing power worth roughly 1.1 billion Paraguayan guaraníes (approximately $146,000) monthly. Combined with dozens of similar busts across the country, ANDE’s total seized ASIC inventory has approached 30,000 units, creating a substantial, zero-cost hardware pool for the pilot.
Another State Turning To Bitcoin
Paraguay’s move places it within a small but significant cohort of sovereign states actively converting energy into on-chain Bitcoin reserves. El Salvador has pioneered this model, directing geothermal power from state-run plants into mining facilities and adding the proceeds to its national BTC treasury, alongside its innovative “volcano bond” initiative. Further east, Bhutan’s sovereign wealth fund has operated hydro-powered mining since at least 2019, using surplus dam electricity to accumulate Bitcoin, which now backs its digital asset and “mindfulness city” development projects.
The ANDE-Morphware pilot is the Latin American, hydro-rich iteration of this emerging statecraft: retain the energy value domestically, utilize state-owned infrastructure, and allow the public treasury—not solely private entities—to capture the financial upside of low-cost, renewable-powered hash rate. By turning seized assets and surplus power into a potential revenue stream, Paraguay is exploring a pragmatic intersection of energy policy, law enforcement, and digital asset strategy.
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Cover image from ChatGPT, BTCUSD chart from Tradingview
