Governor Kathy Hochul of New York has signed into law a measure that restricts bitcoin mining inside the state.
The Act prohibits the issuance of new licences or the renewal of existing licences for proof-of-work (PoW) crypto mining enterprises fuelled by fossil fuels for a period of two years. PoW is a very energy-intensive technique for confirming transactions on the blockchain used by prominent cryptocurrencies, such as bitcoin.
New York Governor Kathy Hochul signed legislation banning the majority of cryptocurrency mining on Tuesday, becoming the first U.S. state to limit the country’s worldwide supremacy in bitcoin mining.
Hochul said in a statement that she wished for New York to remain the “hub of financial innovation” while also emphasizing the need to address mounting concerns over the environmental effect of energy-intensive blockchain activities.
The legislation imposes merely a temporary, two-year prohibition. If a company does not employ renewable energy sources, it will not be permitted to continue operations in the Empire States.
The measure was approved by the New York State Senate in June of this year, but Governor Hochul had delayed signing it into law owing to intense lobbying by the business.
Due to its inexpensive hydroelectric electricity and dormant coal power plants, which may be repurposed for use in massive mining farms, Upstate New York has been a favoured location for American miners.
As of late last year, New York-based mining operations accounted for around one-fifth of the U.S. bitcoin mining hash rate, according to available data. In response to the prohibition, New York’s mining hash rate has now decreased dramatically.
In addition to suspending the renewal of current operating licenses, the new rule will prohibit mining facilities with pending applications from commencing operations.
However, the imposed ban is not as severe as the previously proposed laws, which called for a three-year ban on all cryptocurrency mining in New York. Nonetheless, the stringent legislation may establish a hazardous precedent for other U.S. jurisdictions.
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