New York Considers Proposal for the Regulation of Cryptocurrency Mining
- A New York Senator has proposed the strict regulation of cryptocurrency mining in the state.
- All mining rigs will now have to be environmentally conscious, watching their gas emissions and general impact.
- The problem is global, so a wave of proposals of the same kind could follow soon by other states.
New York Senator Kevin Parker of the Democratic Party has submitted a new bill for consideration, proposing the regulation of cryptocurrency mining in the state. The bill nominates a three-year moratorium to evaluate its success against the set goals, which are related to reducing pollution and increasing sustainability. Parker is worried about the environmental impact of cryptocurrency mining, as things have already gone out of control, and the impact of the activity is not only measurable but significant.
As the Senator states, Cryptocurrency mining centers are an expanding industry in the State of New York, often, but not exclusively, located in retired or converted fossil fuel power stations, including dormant peaker plants. At the same time this is happening, the State of New York is looking to reduce its greenhouse gas emissions by 85% by 2050, in accordance with the Climate Leadership and Community Protection Act. As such, cryptocurrency mining activities will undermine this effort greatly.
The bill further details that a single cryptocurrency transaction uses the same amount of energy needed by an average American household over a month. The global energy usage for crypto ledges is estimated to be equivalent to that of Sweden. If this activity is left unregulated as it currently is, New York could foster greater numbers of crypto-miners, with catastrophic results like local natural resource depletion, ecological damage, reduction in property value, and more.
The proposal wants all cryptomining centers in the state to complete a full environmental impact review under NYCRR §617.10(a) of the State Environmental Quality 17 Review Act - otherwise, they will be banned from operating. This means mining centers operating in converted fossil fuel power plants will need to watch their gas emissions, noise, wildlife impact, water quality, air quality, etc. The limits will be strict precisely because of these state emission goals set by the Climate Leadership Act, so essentially, all these “smokey rigs” will be banned if the law passes.
We will get to know what happens in 120 days when the public commenting circle will close, and the state officials will vote on the proposal. What’s important, though, is that this could be the first of a series of similar regulatory efforts in other states across the country, as all of them face the same problem and associated consequences.