Eric Adam’s promise of making New York the Bitcoin capital of the world might have to wait after new plans to ban some crypto mining facilities in the state.
The state has become a Bitcoin mining hub in recent times due to cheap energy. But that could soon change, with lawmakers proposing a three-year moratorium on permits for power plants that burn fossil fuel to mine bitcoin.
Environmentally conscious lawmakers are seeking a moratorium that directly targets crypto miners. It’s focused on gas plants that sell or provide electricity to miners and might set a precedent for other states or even congress to enact something similar if it passes through.
Many stakeholders in the crypto space have warned that such a moratorium may deny the state the benefits of the new technology.
Crypto stakeholders are of the opinion that a moratorium might set the state back by more than just three years. According to the director of public policy for Foundry, Kyle Schneps, a three years moratorium in the crypto space could amount to three centuries.
In his words “a statewide moratorium that has vague language and captures companies that use mostly renewables is a mistake.”
US on top of the bitcoin mining game
With the U.S. now leading in terms of hash rate percentage for Bitcoin mining, the importance of New York can’t be overstated. The state leads in terms of crypto mining in the U.S., and many crypto companies are establishing themselves in the states where they have access to the cheapest land and infrastructure.
According to Foundry, a crypto company with a large Bitcoin mining pool, 20% of its mining in the U.S. comes from New York.
Although a New York moratorium is significant, it could have bigger consequences. The U.S. Congress is also considering what to do about crypto mining and how to properly regulate the industry.
Several environmental organizations are backing the moratorium, and the lawmakers sponsoring it are confident that it’ll pass. While the bill only targets crypto mining using fossil fuels, crypto miners who use sustainable energy are still worried that they’ll be next on the chopping block.
Their concerns stem from the fact that they sometimes rely on fossil fuels for backup, which means any law could also affect them.