New York Proposes Ban on Crypto Mining

A recent proposal by the New York State Assembly Environmental Conservation Committee aims to halt all proof-of-work (PoW) crypto mining for the next two years.

The mining ban comes as part of the new Climate Leadership and Community Protection Act, which will enforce New York’s progress towards reducing greenhouse gas emissions by 85% by 2050 and net emissions slashed to zero.

While initial versions of the proposal suggested that NYS halt all operations of cryptocurrency mining in the state, this new version has greater focus on “electric generating facilities that utilize a carbon-based fuel and that provide, in whole or in part, behind-the-meter electric energy consumed or utilized by cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions."

The bill would place a moratorium on new crypto mining licenses issued in the state, and would closely study the effects of current mining facilities on the environment.

According to a recent study by CoinShares, New York State is home to the largest mining community in North America, contributing 7.8% of current hash rate to the Bitcoin network alone.

The bill has made a significant step forward by passing the vote in the Assembly committee, but still has to pass the voting process in the full State Assembly, the State Senate, and then signed into law by the state governor. It remains to be seen if the bill can pass both houses of government and then signed by the governor, especially due to the growing amount of general interest in crypto, the growth of crypto businesses in the U.S., and the advancement of crypto lobbying in U.S. politics. A premature ban on crypto mining in New York could divert these mining companies to other states that have more friendly policies towards crypto mining such as Wyoming and Texas, resulting in a loss of tax revenue that the state desperately needs in the post-COVID economic recovery. Regardless, environmental protections are important to consider especially when much more environmentally friendly and sustainable options are available compared to pollutant sources of power such as coal plants.