Cryptocurrency mining faces another round of scrutiny in New York. As the state strives to strike a balance between its economic development goals and climate goals, New York will impose a two-year moratorium on new fossil fuel-powered cryptocurrency mining operations.
Gov. Kathy Hochul signed the contentious bill into law on Tuesday, putting a temporary halt on new authorizations for fossil fuel power plants that shelter proof-of-work virtual currency mining, which is a step in the exchange of digital currency.
This is a first for the country. On November 8, Hochul was elected to a full term after having delayed action on the matter for months after the Legislature passed the measure in June.
Cryptocurrency miners were attracted to New York
Due to the accessibility of abandoned manufacturing facilities and power plants with unused electrical infrastructure, Upstate New York has grown to be appealing to businesses that “mine” digital currencies like Bitcoin.
Hochul, who is guiding the state toward aggressive climate goals, asserted that the moratorium is a crucial step in preventing enhanced emissions from the industry restarting old power plants.
“I am signing this legislation into law to build on New York’s nation-leading Climate Leadership and Community Protection Act, the most aggressive climate and clean energy law in the nation, while also continuing our steadfast efforts to support economic development and job creation in upstate New York.”
The state Department of Environmental Conservation will conduct a study on the environmental effects of the cryptocurrency mining industry as a result of the new law.
This year, the issue generated intense debate in the state Capitol, with the industry urging Hochul to oppose the legislation and environmental groups urging lawmakers to support it.
Despite its revolutionary steps, the bill has a limited scope. No one buying or mining for cryptocurrencies or engaging in other blockchain-related activities would be impacted, nor would the roughly a dozen state operations that use the grid. In addition, if a business has already submitted paperwork to operate in New York, the moratorium on new or renewed permits does not apply to them.
However, the law has sparked worries in the sector that it will encourage other states to follow suit and harm the sector, which has already experienced a challenging period among investors.