Politicians fear that the continued expansion of crypto mining may cause the state to miss ambitious climate targets.
A new law has been proposed in New York that would ban crypto mining for three years.
Data centers that mint new digital assets such as Bitcoin would only be allowed to operate once a comprehensive review of their environmental impact has been performed — and facilities based in converted fossil fuel power plants would be forbidden.
Lawmakers pointed to how “a single cryptocurrency transaction uses the same amount of energy that an average American household uses in one month, with an estimated level of global energy usage equivalent to that of the country of Sweden.”
They fear that the continued expansion of crypto mining would cause dramatic increases in the amount of energy consumed in New York, and this could jeopardize the state’s efforts to become more environmentally friendly. At present, targets have been set to ensure that greenhouse gas emissions are cut by 85% by 2050 — with all sectors expected to achieve net-zero carbon emissions.
Will It Pass?
The proposals are at a very early stage, and the bill has only just been referred to the US Senate’s environment committee.
It comes as a number of countries around the world begin to assess the impact of Bitcoin mining.
The Inner Mongolia region of China, which was home to one of the world’s biggest BTC mining hubs, recently announced plans to shutter existing operations and ban new projects from starting to operate.
However, critics warn that this could cause mining operations to go underground with a view to evading detection from authorities.
Although Tesla’s Elon Musk and Twitter’s Jack Dorsey have argued that Bitcoin encourages development in renewable energy, the challenge right now is that it’s difficult to verify the exact percentage of mining operations that take place in an eco-friendly way.