New York lawmakers on Friday passed a bill banning certain bitcoin mining operations in the first-of-its-kind legislation, CNBC reports.
The New York Senate on Friday passed a two-year moratorium on bitcoin mining operations that use proof-of-work authentication methods to validate blockchain transactions. Proof-of-work mining, which eats a ton of electricity, is used to create bitcoin.
Lawmakers said the bill would reduce the state’s carbon emissions. The bill will only allow operations that use 100% renewable energy to continue receiving permits.
Crypto companies lashed out over the ban.
“This is a significant setback for the state and will stifle its future as a leader in technology and global financial services. More importantly, this decision will eliminate critical union jobs and further disenfranchise financial access to the many underbanked populations living in the Empire State,” Perianne Boring, founder and president of the Chamber of Digital Commerce, told CNBC.
The Biden administration is working on its own plan to rein in emissions from crypto mining.
The White House Office of Science and Technology is studying the effect of mining on energy use and the potential for the growing technology to impede efforts to tackle climate change.
Dr. Costa Samaras, the principal assistant director for energy, told CNBC that the White House is “taking a look at the implications for energy policy, including how cryptocurrencies can affect grid management and reliability.”
The office is expected to finalize its recommendations in September.
Crypto advocates claim that mining could actually help reduce emissions.
“Proof-of-work mining has the potential to lead the global transition to more sustainable energy,” Boring told CNBC.
“The regulatory environment in New York will not only halt their target – carbon-based fuel proof of work mining – but will also likely discourage new, renewable-based miners from doing business with the state due to the possibility of more regulatory creep,” argued John Warren, CEO of GEM Mining.