How U.S. Stablecoin Law Could Accelerate Cryptocurrency Mining’s Threat to South America’s Ecosystems

U.S. Regulation Sparks Environmental Concerns Thousands of Miles Away

The GENIUS Act, signed by former U.S. President Donald Trump in July 2025, imposes strict reserve requirements on stablecoins—cryptocurrencies pegged to the U.S. dollar. While aimed at financial stability, the law may unintentionally boost global demand for energy-intensive cryptocurrency mining, with severe consequences for South America’s most vital ecosystems.

How the GENIUS Act Fuels Cryptocurrency Demand

The GENIUS Act mandates that stablecoin issuers hold reserves—primarily in U.S. dollars or Treasury securities—equivalent to the value of coins in circulation. This formalizes a previously underregulated market, potentially increasing investor confidence and adoption of cryptocurrencies worldwide.

"The GENIUS Act has more potential to expand global demand for cryptocurrencies than to slow the sector."

Energy Hunger of Cryptocurrency Mining

Cryptocurrency mining relies heavily on electricity, particularly through the energy-intensive proof of work validation method. This process requires continuous operation of thousands of computers solving complex cryptographic problems to validate transactions.

According to the International Energy Agency (IEA), global electricity consumption by cryptocurrencies could surge by over 40% by 2026. In 2022 alone, cryptocurrencies consumed approximately 110 terawatt-hours of electricity—roughly five times Paraguay’s annual consumption and a significant portion of Brazil’s total usage.

Why Miners Target South America

To maximize profits, cryptocurrency miners seek locations with the cheapest electricity. In South America, this often means exploiting energy grids in countries like Brazil and Paraguay, where mining operations are already straining local infrastructure and sparking environmental debates.

Cleber Leite, Director of Sustainable Energy and Bioeconomy at the Instituto E+ Transição Energética in Brazil, notes that miners prioritize regions with low-cost, often subsidized, electricity—regardless of the environmental cost.

Critical Ecosystems at Risk

South America’s biodiversity hotspots, including the Pantanal and Gran Chaco, face growing threats from expanded mining activities.

The Pantanal: A Global Biodiversity Treasure

The Pantanal, the world’s largest tropical wetland, spans Brazil, Bolivia, and Paraguay and relies on the hydrological balance of the Paraguay River basin. Seasonal floods, regulated by this basin, are essential for sustaining the region’s unparalleled wildlife, including jaguars, caimans, and thousands of bird species.

The Gran Chaco: South America’s Last Wild Frontier

The Gran Chaco, the continent’s largest dry forest, stretches across Paraguay, Bolivia, and Argentina. It is home to iconic species such as jaguars, giant armadillos, and hundreds of bird species, as well as Indigenous communities whose traditional territories are increasingly encroached upon by mining and energy projects.

Expanding Energy Infrastructure Poses Further Threats

As mining operations grow, so does the demand for new energy infrastructure. In environmentally sensitive regions like the Pantanal and Gran Chaco, this often means clearing land, diverting water, and building power lines—all of which disrupt fragile ecosystems and displace local communities.

Experts warn that without strict regulation, the push for cheap energy to support cryptocurrency mining could irreversibly damage these irreplaceable biomes.