In New York state there is a proposed bill, Assembly Bill A7389C, that would restrict the mining of digital assets. Worried that other states might make similar moves, cryptocurrencies are currently trying to fight this proposal. The bill passed the Environmental Conservation Committee in the Assembly, and it is awaiting a vote in the full state legislature.
Jimmy Vielkind who dissects this proposal in the Wall Street Journal observed, “The bill would place a two-year moratorium on reactivating fossil-fuel power plants for off-the-grid cryptocurrency mining. Cryptocurrency miners earn digital cash by solving mathematical equations with computers that require large amounts of energy to power.”
Modern innovations have created a larger dependency on electricity especially when it comes to the rise of cryptocurrencies and electric cars. Limiting crypto mining in New York State could drastically decrease the amount of revenue that could be beneficial from these cryptocurrencies calling New York home.
Kristen Smith, Blockchain Associate Executive Director, when asked about the bill by Yahoo Finance said “We're also seeing some state legislators have concern about the energy consumption of mining and are moving quickly to pass bills.
So what's going on with New York is actually more of a defensive play. But there are other members in the assembly that are interested in learning about this. I think that what's the key to crypto policy, whether it be at the state level, or at the federal level, or even internationally is you can't get good policy without having an informed policymaking community.”
Following the Wall Street Journal article, Vielkind expanded his thoughts in a blog post saying,
“The mining uses large amounts of electricity to power computer servers that bid for digital cash by solving complex mathematical equations. Some companies have co-located at power plants, where they can get cheap power that bypasses the electrical grid.”
The cryptocurrency lobby has been trying to avoid this bill in New York from becoming a standard for across the United States, doubling their spending on lobbying nationwide, according to research firm Crypto Head.
“We view the battle going on in New York right now as a litmus test of what other states may do,” said Kyle Schneps, director of public policy for Foundry Digital LLC, which operates a bitcoin mining pool and is lobbying state officials.
The key to this solution is for New York to focus on increasing in-state generation to create thousands of skilled, good paying, sustainable jobs and keep these significant economic benefits in the state.