New York Governor Kathy Hochul has signed into law a bill clamping down on bitcoin mining within the state.
The legislation places a two-year ban on new permits being issued or existing permits being renewed to conduct fossil fuel-powered proof-of-work (PoW) crypto mining operations. PoW is a particularly energy-hungry method for verifying transactions on the blockchain used by popular cryptocurrencies, including bitcoin.
New York Imposes 2-Year Moratorium On Bitcoin Mining
On Tuesday, New York Governor Kathy Hochul signed a law that will ban most cryptocurrency mining, becoming the first state in the United States to curtail the country’s global dominance in bitcoin mining.
In a statement explaining her approval, Hochul said she wanted New york to remain the “center of financial innovation” but also emphasized the need to address the growing concerns about the environmental impact of energy-intensive blockchain operations.
The law only imposes a temporary, two-year ban. Unless a firm uses renewable energy sources, it would not be allowed to continue operating in the Empire state.
The bill was passed by the New York State Senate earlier in June this year, but Governor Hochul had until now withheld from signing it into law due to frenetic industry lobbying.
New York Has Considerable Hashrate Share
Upstate New York has emerged as a popular destination for miners in the United States due to its cheap hydroelectric power and idle coal power plants, which can be redeployed into huge mining farms.
Data shows that New York-based mining firms accounted for approximately one-fifth of the U.S. bitcoin mining hash rate as of late last year. However, New York’s mining hash rate has since dropped significantly in the face of the ban.
In addition to pausing renewals for the existing operating permits, the new law will also prevent mining facilities with pending applications from beginning their operations.
Nonetheless, the enacted moratorium is not as harsh as the previously proposed bills, which called for a three-year ban on all crypto mining activities in New York. That being said, the restrictive laws could set a dangerous precedent for other states in the U.S.