New York became the first U.S. state to enact a temporary ban on new cryptocurrency mining permits at fossil fuel plants, despite a strong lobby effort by cryptocurrency industry groups against the measure.
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- The legislation, signed into law by Gov. Kathy Hochul, will impose a two-year moratorium on crypto mining companies that are seeking permits to convert fossil fuel plants in the state into mining operations.
- It also caps the electrical consumption of existing operations at their current levels. Mines seeking to use renewable energy alternatives are unaffected.
- Cryptocurrency mining is the process of electronically processing cryptocurrency transactions. Bitcoin, the world’s largest cryptocurrency, relies on a proof-of-work (PoW) system, where miners compete to process the next group of transactions.
- The bill is aimed at mitigating and assessing the environmental impact of the industry. The annualized carbon footprint of Bitcoin, the world’s largest cryptocurrency, is comparable to the carbon footprint of the country of Belarus.
- National cryptocurrency industry groups had unsuccessfully lobbied Hochul, a Democrat, to veto the bill. Hochul defeated a candidate seen as more crypto friendly, Lee Zeldin, in the recent midterm elections.
- Crypto advocacy group Chamber of Digital Commerce denounced the bill in a statement, arguing “no other industry in the state has been sidelined like this for its energy usage.”
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