New York lawmakers passed a bill banning certain bitcoin mining companies that use carbon-based power sources in an early morning vote in Albany on Friday. The bill now goes to Governor Kathy Hochul’s desk, where she can sign it or veto it.
According to Perianne Boring, founder and president of the Chamber of Digital Commerce, if Hochul passes the measure, New York will be the first state in the US to outlaw blockchain technology infrastructure. According to industry insiders, it might have a domino effect across the United States, which is currently at the forefront of the global bitcoin mining sector, accounting for 38% of all miners.
The law, which passed the State Assembly in late April before proceeding to the State Senate, asks for a two-year ban on some cryptocurrency mining operations that employ proof-of-work authentication methods to confirm blockchain transactions. Bitcoin is created through proof-of-work mining, which necessitates high-tech equipment and a lot of electricity. Ethereum is transitioning to a less energy-intensive procedure, although it will continue to utilize current method for at least a few months longer.
The drive for an eleventh-hour vote came after the state legislature’s leadership managed to sway some previously reluctant senators.
Lawmakers who support the bill say they want to reduce the state’s carbon footprint by cracking down on mines that use electricity from fossil-fuel-burning power plants. If it succeeds — for the next two years, no proof-of-work mining companies will be allowed to extend or renew permits, and no new entrants would be allowed to come online unless they use 100 percent renewable energy.
According to Boring, the net impact of this would be to undermine New York’s economy by forcing businesses to relocate.
- “This is a significant setback for the state and will stifle its future as a leader in technology and global financial services. More importantly, this decision will eliminate critical union jobs and further disenfranchise financial access to the many underbanked populations living in the Empire State,” Boring tells CNBC.
