The New York Senate bans cryptocurrency mining using carbon-based fuel

According to the document, a moratorium on issuing and renewing permits for the use of electricity generated by facilities using carbon fuel is being introduced on the state’s territory. In particular, this applies to mining using the Proof-of-Work (PoW) algorithm to confirm transactions on the blockchain. The bill also provides for the completion of a comprehensive study of the impact of cryptocurrency mining operations on the environment.

Classic digital currency mining based on the PoW model is a rapidly growing industry in the state of New York. However, the bill's authors believe that the continuous mining of cryptocurrencies will seriously increase energy consumption and negatively impact the local environment.

The Climate Leadership and Community Protection Act (CLCPA), adopted in 2019, requires the state to reduce greenhouse gas emissions by up to 85% by 2050. Given the rapid development of the crypto market and the active mining of digital currencies, the achievement of such results is threatened.

The presented restrictions are introduced for two years to reduce the carbon footprint and mitigate climate change's current and future effects. It is expected that a general report on the impact of mining on the environment will be prepared during this period. Its structure will include information on the number and location of mining companies, the amount of electricity they consume, their sources, the amount of greenhouse gas emissions, and other impacts on the environment and public health.

The current situation was commented on by the co-founder and CIO of Valkyrie Investments, Steven McClurg. In his opinion, the signing of the bill by the governor will do more harm to the state than good and will lead to the displacement of miners to other regions to work with alternative energy.