ALBANY, N.Y. — New York could become the first state in the nation to curtail cryptocurrency mining after state lawmakers approved a two-year moratorium early Friday.
The measure—which attracted intense lobbying from both environmental and cryptocurrency groups—now heads to Gov.
Kathy Hochul’s
desk. The Democratic governor hasn’t said if she would sign the bill, and said last month that she wanted to balance protecting the environment and new job opportunities.
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. Mining that taps into the electrical grid would still be allowed under the bill.
Some miners secure low-cost electricity by bypassing the power grid and reviving closed power plants, creating jobs in upstate areas. Sustainability groups and some New York state lawmakers object to the practice because of the environmental impact.
Cryptocurrency companies and their trade associations said the bill would send a negative signal to a growing industry and could set a precedent that other states will follow. Federal regulators have been slow to regulate the market, leaving state governments to grapple with policies on their own.
More than 160 crypto-related bills are up for consideration this year in 37 states, according to the National Conference of State Legislatures. Most laws enacted by states in recent years were intended to encourage cryptocurrency development.
The Democrat-controlled New York state Assembly approved the bill in April, but the state Senate didn’t vote on it until the final hours of the annual legislative session.
Chamber leaders had stalled plans to bring the measure up for a floor vote, but were swayed by supportive rank-and-file senators as well as many phone calls from activists, according to state Sen. Kevin Parker.
“We’re in the middle of a climate emergency, and we need to lower our climate footprint,” Mr. Parker, a Brooklyn Democrat who sponsors the bill, said Friday. “Running these plants does not help what we’re trying to do or clean up our environment.”
The Blockchain Association, which represents cryptocurrency miners and exchanges, opened an Albany office in part to oppose the moratorium legislation. Kristin Smith, the group’s executive director, said it would make New York unique among states.
“In a state that already presents challenges to doing business, enacting this prohibition on new mining operations in New York sends a clear signal that the crypto industry is unwelcome,” Ms. Smith said in a statement. “We strongly encourage Governor Hochul to recognize the economic benefits and job creation of the crypto industry—now is not the time to cede New York’s position as the financial capital of the world.”
Write to Jimmy Vielkind at [email protected]
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Appeared in the June 4, 2022, print edition as ‘New York Crypto Mining Bill Clears.’
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