New York State May Restrict Cryptocurrency Mining Soon

New York State may soon limit cryptocurrency mining to curb greenhouse gas emissions.

New York lawmakers have passed a law that temporarily bans new bitcoin mining operations. On Friday, state senators voted 36 to 27 in favor of the bill. Now it’s on Gov. Katie Hochul’s desk. She decides whether to sign it or veto it. This law will come into force immediately after signing.

New York State May Restrict Cryptocurrency Mining Soon

A similar attempt was thwarted last year. The New York State Senate passed it, not the Assembly. This time, the law passed the Assembly stage in April and the Senate a few days ago.

This law establishes a two-year moratorium on licenses for cryptocurrency mining operations that use energy-intensive proof-of-work methods to verify transactions on the blockchain. At the moment, this is especially true for Bitcoin and Ethereum, the two most popular cryptocurrencies, although the latter is slightly different.

This moratorium applies only to mining operations using fossil energy sources. Operations based on renewable energy or aimed at mining proof-of-stake cryptocurrencies, for example, that require less energy, will not be affected. Just like existing mining enterprises and those whose license is in the process of renewal.

This is necessary to limit greenhouse gas emissions.

During the duration of the moratorium, New York will conduct a study on the environmental impact of proof-of-work methods in accordance with the text of this proposal. As CNBC points out, New York City has ambitious climate targets. There is talk of an 85% reduction in greenhouse gas emissions by 2050, in line with the Climate Leadership and Public Protection Act.

New York has become a hotbed for crypto mining in part because of its high hydroelectricity, low cost of electricity, and cool climate compared to other states in the country, which means less energy to cool machines.

Some mining companies have threatened to leave New York State due to this legal uncertainty and move to other parts of the country. Crypto advocates have suggested that, given New York’s status as the rightful leader, other states might follow suit.

The Biden administration is currently working on an extensive bitcoin mining bill. The White House is studying the impact of these technologies on greenhouse gas emissions.