Yahoo Finance New York passes a bill to limit bitcoin mining
It's up to Governor Kathy Hochul whether to sign it into law.
New York lawmakers have passed a bill that would temporarily ban new bitcoin mining operations. Early on Friday, state senators voted 36-27 to pass the legislation. It's now bound for the desk of Governor Kathy Hochul, who will sign it into law or veto the bill. The law would come into effect immediately after it's signed.
An attempt to enact similar legislation last year hit a wall when the New York State Senate passed it but Assembly members did not. The latest bill passed the Assembly in April.
The legislation seeks to establish a two-year moratorium on licenses for cryptocurrency mining operations that use power-hungry proof-of-work authentication methods for validating blockchain transactions. Right now, bitcoin and ethereum (the two largest cryptocurrencies) fall under that category, though the latter is shifting to a different setup.
The moratorium only covers mining operations that run on carbon-based power sources. Any that harness entirely renewable energy sources or an alternative to proof of work that requires less power won't be affected. Existing operations and those already going through a permit renewal process won't be impacted either.
While the moratorium is in place, New York will carry out a study into the environmental impact of proof-of-work authentication methods, per the bill. As CNBC notes, New York has ambitious climate goals that require the state's greenhouse gas emissions to be reduced by 85 percent by 2050 under the Climate Leadership and Community Protection Act.
New York became a hotbed for crypto mining operations in part due to its plentiful hydroelectricity, low electricity prices and cooler climate than other areas of the US (which means less energy is needed to cool mining hardware).
Some mining companies have threatened to leave New York due to regulatory uncertainty and set up shop in more crypto-friendly states. Even so, crypto proponents have suggested that, given New York's status as a legislative leader, other states could follow suit with similar regulations.
Meanwhile, the Biden administration is working on a policy regarding bitcoin mining. The White House is looking into the impact of such technology on greenhouse gas emissions.
