Paraguay’s ANDE Signs MoU with Morphware to Launch First Government-Led Bitcoin Mining Program

TLDR:

• • Paraguay’s ANDE signed an MoU with Morphware to launch the country’s first government-led Bitcoin mining program.
  • Around 1,500 machines seized from illegal operators will be redeployed at ANDE-controlled sites during the pilot phase.
  • Morphware advised selling BTC futures on U.S. exchanges to stabilize revenue and reduce Paraguay’s exposure to price swings.
  • Paraguay aims to monetize surplus hydroelectric power domestically through Bitcoin mining instead of exporting it at low rates.
    

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Bitcoin mining in Paraguay is moving in a new direction under a formal government initiative. The state electricity utility, ANDE, has signed a Memorandum of Understanding with Morphware.

The agreement sets up a government-led operation using thousands of confiscated mining machines. Paraguay’s surplus hydroelectric power will fuel the program. Around 1,500 seized miners will be deployed at ANDE-controlled sites in the pilot phase.

ANDE and Morphware Set Up a State-Run Pilot Program

The MoU positions Morphware as a technical and advisory partner for regulated operations. Authorities had seized the equipment from operators who stole electricity or misclassified their businesses.

Those operators gained access to lower power rates meant for other sectors. Morphware founder and CEO Kenso Trabing described government warehouses filled with idle machines. “They’re literally stacked to the ceiling,” Trabing told Bitcoin Magazine.

Morphware’s plan is to redeploy the confiscated machines at utility-controlled sites near substations. ANDE will retain full ownership and oversight throughout the operation.

Trabing was clear about the boundaries of Morphware’s involvement, stating, “They have no experience mining Bitcoin. Our role is an advisory role.” The company will provide training, operational guidance, and technical expertise to ANDE staff.

Many of the existing utility structures already sit next to substations and can be retrofitted affordably. The planned upgrades include removing walls, installing ventilation, and adding transformers and metering equipment.

As a result, stranded electricity becomes a new domestic revenue stream for the state. Paraguay currently exports much of its hydroelectric output at relatively low rates.

By running operations through ANDE-controlled infrastructure, the government can enforce compliance directly. This also removes the illegal operators who had previously misused the grid.

Trabing drew a clear line between the new model and past abuses, saying, “This is about regulated, utility-controlled sites. Not people hiding in the countryside.”

Paraguay Weighs Options for Managing Mined Bitcoin

How Paraguay will manage its mined Bitcoin remains under active discussion among government agencies. Some officials favor selling Bitcoin immediately to fund public programs.

Those programs include social security, education, and infrastructure projects across the country. Others have proposed holding some Bitcoin or using financial markets to manage price risk.

Morphware has advised a conservative strategy centered on derivatives trading. The company suggested selling BTC futures on U.S. exchanges to stabilize government revenue over time.

Morphware also cautioned against direct government custody of Bitcoin, given Paraguay’s cybersecurity history. A ransomware attack once compromised systems across multiple government ministries.

The broader economic case behind the program is straightforward, according to Trabing. “When you do the math, it’s so simple,” he said. “You’re selling electricity for a fraction of what it can earn if you use it locally.” That logic is driving the shift toward domestic Bitcoin mining over continued electricity exports.

Looking further ahead, Trabing sees this model reshaping how energy utilities operate globally. “This is what the future of midstream electricity looks like,” he said.

“Grids that don’t just deliver power, but own a stake in the digital infrastructure they enable.” If the pilot succeeds, Paraguay could scale using structured financial products tied to future Bitcoin production.

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