Members of the New York Assembly’s Ways and Means Committee considered the bill at a meeting on Monday afternoon, ultimately voting to send the bill to the floor for a vote by the full Assembly.
Despite widely circulating misunderstandings that the bill would ban all crypto mining in New York, the scope of the bill is fairly limited. If passed, it would place a two-year moratorium on the issuance of new permits for proof-of-work mining operations proposing the use of an “electric generating facility that utilizes a carbon-based fuel.”
The bill would also require a study by the New York State Department of Environmental Conservation on proof-of-work mining’s impact on the state’s ability to reach the ambitious climate goals set forth by the Climate Leadership and Community Protection Act, which mandates that New York’s greenhouse gas emissions be cut by 85% by 2050.
If passed, the bill could present a serious obstacle for mining operations like Greenidge Generation, which fired up a once-shuttered coal power plant in upstate New York and converted it to run on natural gas to power its bitcoin mining operation – the source of much controversy among both lawmakers and environmental groups.
Though Greenidge Generation’s existing operation wouldn't be affected by the bill because its permit application is already outstanding, it would be unable to expand its operations, and future mining operations hoping to replicate the Greenidge model wouldn't be allowed to do so.
The bill wouldn't affect existing proof-of-work mining operations or those that plan to use the state’s abundant – and cheap – sources of renewable energy. In some parts of New York state, where electricity is generated by the Niagara River and other sources of hydropower, crypto miners have found industrial power as cheap as 1.9 cents per kilowatt hour. The average cost in the U.S. was 7.26 cents per kilowatt hour, according to Statista.
An earlier version of the bill, which died in the state Assembly last year after facing resistance from the electrical workers’ union, originally called for a three-year moratorium on all crypto mining in the state.
Despite the narrower scope of this version of the bill, however, crypto advocates are concerned that its passage would pave the way for future legislation cracking down on crypto mining in New York and that those crackdowns could hurt the crypto industry across the state.
“A two-year mining ban sends a really bad message to the blockchain industry, to crypto companies, to Web 3 companies, that New York is saying ‘You’re not welcome here,'” said John Olsen, New York state lead at the Blockchain Association.
The full Assembly vote could take place as early as Thursday, according to sources familiar with the matter. If passed there, the bill will move to the state Senate.
UPDATE (April 26, 2022, 21:26 UTC): Links to bill.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.