The New York State Senate on Friday approved a two-year moratorium on certain kinds of new crypto mining operations in an effort to address some of the environmental issues related to the activities.
The 36-27 vote came in the early morning hours as the Senate wrapped up its legislative session. The bill was previously approved by the New York State Assembly and now goes to Gov. Kathy Hochul for her potential signature.
The first-in-the-nation partial ban targets proof-of-work mining that utilizes behind-the-meter electricity from fossil fuel plants, Politico reported. Upstate New York has become an attractive destination for companies that mine digital currencies because of the availability of former power plants and manufacturing sites with unused electrical infrastructure.
Bitcoin and other cryptocurrencies use mining to generate new coins and verify transactions. This involves vast, decentralized networks of computers around the world and huge amounts of electricity. The networks verify and secure blockchains – the virtual ledgers that document cryptocurrency transactions. In return for contributing their processing power, computers on the network get rewarded with new coins.
The New York legislation exempts operations that have already secured or applied for new or renewed air permits and the bulk of facilities in New York that rely on power from the electric grid. But supporters still see it as an important step to avoid increased emissions from the industry restarting old power plants.
The crypto industry lobbied heavily against the bill, which split Senate Democrats, some of whom worried that it would stifle job creation. Crypto mining companies based in New York have threatened to leave the state if the moratorium is passed, pointing to the comparative ease of doing business in more mining-friendly states like Texas, Coindesk reported.