Is the governor of New York banning Bitcoin mining completely? Some crypto-mining projects based on carbon-based energy have been suspended in New York. Mining companies indicate that the state will not be able to extend or renew their licenses for the next two years due to the ban, which could have implications for companies in the United States.
‘First of its kind’ PoW mining moratorium begins in New York
New York Governor Kathy Hochul on Tuesday signed a bill banning cryptocurrency investments using energy from fossil fuels. The law will prevent companies involved in proof of work (PoW) that do not use renewable energy such as hydroelectricity to expand and renew or obtain new capacity for the next two years. The bill introduces a temporary ban, which was passed by the state legislature and Senate last spring, specifically targeting PoW verification, a process used to make blockchain transactions verified for cryptocurrencies such as bitcoin due to and it requires a lot of electricity to run a powerful computer.
In a legal filing reported by CNBC, Hochul said the decision “is the first of its kind in the country.” According to a Bloomberg report, the governor postponed the signing of the mining law amid large companies’ demands. He also expressed his intention to “ensure that New York continues to be a center of economic development” and prioritize environmental protection.
Industry officials fear the ban could have a domino effect across the United States, a major trading hub in the crypto market. The national share of the average global monthly hashrate reached 38% in January, according to the Cambridge Bitcoin Electricity Consumption Index. The Chamber of Digital Commerce has warned: “The approval will set a dangerous precedent in determining who may or may not use power in New York State.”
Is the governor of New York harming the New York economy with this move?
The law will cripple New York’s economy and damage its future as a global leader in technology and financial services, said Chamber founder and CEO Perianne Boring. In previous statements, he also indicated that this decision will reduce jobs and “take away financial opportunities for many people who have no money.”
Other experts say that the ban could force crypto mining companies to move to more favorable locations such as Georgia, North Carolina, North Dakota and Wyoming, with jobs and taxes coming from New York out. . One of them is Texas, which, in addition to good standards, also offers access to renewable energy and energy from sources such as natural gas.
Aggressive carbon reduction targets were also part of the thinking behind last year’s government crackdown on cryptocurrency investments in China, a former company official said. In Europe, the proponents of the idea of blocking PoW mining have tried to add provisions restricting activities for cryptocurrencies based on the power-limiting European legal framework EU law on Crypto Asset Markets (MiCA). In October, amid increasing pressure from Russia, Brussels renewed its efforts to reduce energy consumption and crypto mining.
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