New York is taking a first step in the country to curb the spread of cryptocurrency mining, under legislation Gov. Kathy Hochul signed into law on Tuesday. The move comes amid growing scrutiny of the cryptocurrency industry following the collapse of the FTX exchange this month. But the New York measure, passed by the state legislature in June, specifically addresses crypto’s environmental concerns.
“I will ensure that New York remains the center of financial innovation while also taking important steps to prioritize protecting our environment,” Hochul, a Democrat, said in a post explaining her endorsement.
The new law places a two-year moratorium on new and renewed air permits for fossil fuel power plants used for energy-intensive “proof-of-work” cryptocurrency mining — a term for the computational process that records transactions in bitcoin and the like and secure forms of digital money. Proof-of-work is the blockchain-based algorithm used by bitcoin and some other cryptocurrencies.
The law also requires the Department of Environmental Conservation to assess how crypto mining affects the state’s ability to meet its climate goals. Environmentalists said New York was undermining those goals by allowing crypto mining operations to run their own natural gas-fired power plants.
Cryptocurrency advocates, meanwhile, argued that the measure would hinder New York’s economic development, and singled out crypto without addressing other fossil fuel uses.
Cryptocurrency mining requires specialized computers that consume large amounts of energy. A study calculated that as of November 2018, bitcoin’s annual electricity consumption was similar to Hong Kong’s in 2019, according to the US Energy Information Administration.
Some miners are looking for ways to reduce their reliance on fossil fuels to produce the electricity they need.
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