Quick overview

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State-owned utility Administración Nacional de Electricidad (ANDE) has signed an agreement with Morphware to put 30,000 confiscated mining machines into operation. The initiative aims to monetize excess electricity from the Itaipu Dam and turn electricity theft into public revenue.

In an unprecedented move for public administration in South America, Paraguay is moving toward becoming the first country in the region to operate a state-managed mining infrastructure for Bitcoin. The initiative, led by ANDE, involves repurposing thousands of mining devices seized during crackdowns on illegal crypto mining farms.

Through a memorandum of understanding (MOU) with Morphware, the Paraguayan government plans to give productive use to roughly 30,000 processing units that had been sitting idle in government warehouses after being confiscated for operating illegally or through electricity theft.

Itaipú’s energy surplus as an economic driver

Paraguay’s strategy relies on its strongest competitive advantage: abundant and inexpensive hydroelectric energy generated by the Itaipú Dam. Historically, the country has exported much of its excess electricity at relatively low prices. Now, ANDE plans to redirect that underutilized power toward digital asset mining in order to capture more value domestically.

The pilot program includes several stages:

• Initial phase: Installation of 1,500 units at ANDE-controlled sites located near electrical substations.
• Infrastructure upgrades: Adaptation of facilities with ventilation systems, transformers, and high-precision metering equipment.
• State oversight: ANDE will retain ownership and regulatory control of the facilities, while Morphware will provide technical guidance and staff training.

From illegal activity to state-run industry

Kenso Trabing, CEO of Morphware, described the agreement as a “transformational opportunity” for the country. By deploying the machines in regulated sites, Paraguay aims to convert a security problem—electricity theft by illegal miners—into a legitimate source of revenue.

“Unused electricity becomes income for Paraguay, serving both the Bitcoin network and the global AI economy,” the executive said.

If the pilot proves successful, it could pave the way for future expansions financed through financial products tied to Bitcoin production or artificial intelligence applications.

What happens to the mined assets?

Although no specific timeline has been announced for the start of operations, discussions within the Paraguayan government are focusing on how to manage the potential proceeds. Two main options are being considered:

• Direct sale: Selling the mined bitcoins to finance public spending.
• Strategic reserve: Holding part of the assets as a hedge against financial risks and to diversify national reserves.