New York State Passes Law that Bans Crypto Mining Based On Non Renewable Energy

The New York State Assembly has passed a legislation that outlaws crypto currency mining that employs non-renewable energy sources. Democrat Anna Kelles sponsored the assembly bill A7389C. An assembly committee had voted on Monday to advance the bill to a full vote of the state assembly. The new law will impose a two-year moratorium on those crypto mining firms that use carbon based energy sources in the state. The Senate is already busy with a corresponding bill there.

The bill says that firms that mine crypto through non-renewable sources will not be allowed to establish their operations in New York. Those who already have a set up in the state will remain unaffected by the law and so will those who employ renewable sources of energy. But those who use carbon based power will not be able to renew their permits in case they want to scale up their crypto mining facilities.

The bill specifies, “(the New York Energy Department) shall not approve a new application for or issue a new permit ….. for an electric generating facility that uses a carbon-based fuel, and that provides, in whole or in part, behind-the-meter electric energy consumed or utilised by cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions.”

It also makes the state responsible for preparing a generic environmental impact statement in order to evaluate the proof of work mining and mining facilities that operate in the New York state. The legislators who voted for the bill held that crypto mining increases the carbon footprint and impedes state effort to achieve the carbon emission goals.

On the other hand, those involved in the crypto mining business said that the new law would simply encourage the crypto mining businesses to relocate to other states and this can impact the employment and geopolitical interests of the US.

John Olsen, from Blockchain Association, stated, “The intention of the bill is to prevent new mining operations that would draw power from fossil fuel generation, even if it’s partial. The impact, though, is really just economic in the sense that good-paying jobs are going to be going to other states, and mining operations that would face less regulatory scrutiny, in terms of environmental impact, would be setting up shop.”

The New York state government says that the state already has enough renewable energy that can power the crypto mining in the state. The electricity rates near Niagara River hydroelectric dams is lowest in the USA.

Power consumption by Blockchain based cryptos, particularly Bitcoin has been in focus for a long time now, as these involve massive usage of electricity to generate the currency. Bitcoin itself is said to consume the energy equivalent of Argentina for its generation.