New York Governor Signs Law Partially Banning Bitcoin Mining on Fossil Fuels – Tuesday, New York Governor Kathy Hochul signed a law partially prohibiting the use of fossil fuels to mine cryptocurrencies. In the next two years, companies engaged in proof-of-work (PoW) mining that do not use only renewable energy such as hydropower will be prohibited from expanding, renewing, or obtaining new permits.
The bill introducing the temporary restrictions, which was passed by the state assembly and senate this past spring, targets PoW authentication, the method used to validate blockchain transactions for cryptocurrencies such as bitcoin, because it requires a substantial amount of electricity to run the powerful computing hardware.
Hochul stated in a legal filing cited by CNBC that the decision “is the first of its kind in the country.” According to a Bloomberg report, the governor has delayed signing the mining law due to intense lobbying from the sector. In addition, she emphasized her intention to “ensure that New York remains the epicenter of financial innovation” while placing an emphasis on environmental protection.
Representatives of the industry are concerned that the ban could have a domino effect throughout the United States, a major player in the cryptocurrency mining market. According to the Cambridge Bitcoin Electricity Consumption Index, China’s share of the average monthly global hashrate was close to 38% in January. The Chamber of Digital Commerce issued a warning statement: “The approval will set a dangerous precedent in determining who may or may not use power in New York State.”
Perianne Boring, founder and chief executive officer of the Chamber, stated that the law would weaken New York’s economy and impede its future as a global leader in technology and financial services. In previous remarks, she also mentioned that the decision will eliminate jobs and and “disenfranchise financial access to the many underbanked populations.”
According to other experts, the moratorium could force crypto mining companies to relocate to states with more favorable regulations, such as Georgia, North Carolina, North Dakota, and Wyoming, with jobs and tax revenue leaving New York. In addition to accommodating regulations, Texas also provides access to abundant renewable power and excess energy from sources such as stranded gas.
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In addition to aggressive carbon-reduction targets, last year’s government crackdown on cryptocurrency mining in China, the former industry leader, was motivated in part by carbon-reduction goals. In Europe, proponents of the prohibition of PoW mining attempted to amend the EU’s Markets in Crypto Assets (MiCA) legislation to prohibit services for cryptocurrencies that employ the energy-intensive mining technique. In October, in response to limited energy supplies from Russia, Brussels redoubled its efforts to reduce crypto extraction’s energy consumption.