Landmark bill to limit cryptomining passes NY Legislature

ALBANY

New York lawmakers have passed a milestone environmental measure designed to tap the brakes on the spread of cryptocurrency mining operations that burn fossil fuels.

Both supporters and opponents say that the closely watched bill, approved early Friday by the state Senate, is the first of its kind in the U.S.

If it becomes law, it would establish 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 and secures transactions in bitcoin and similar forms of digital money. Proof-of-work is the blockchain-based algorithm used by bitcoin and some other cryptocurrencies.

Environmentalists are urging Gov. Kathy Hochul to sign the legislation. They say the state is undermining its long-term climate goals by letting cryptomining operations run their own natural gas-burning power plants.

Cryptocurrency advocates complained that the measure singled out the industry without addressing other fossil fuel use. They argue that the legislation would crimp economic development in New York while other states court the burgeoning field.

“The message from the bill and the embrace of that kind of policy is not a good one for an industry that really can go anywhere,’’ said John Olsen of The Blockchain Association, an industry group.

Cryptocurrency mining requires specialized computers that consume huge amounts of energy. One study calculated that as of November 2018, bitcoin’s annual electricity consumption was comparable to Hong Kong’s in 2019.

Some miners are looking for ways to reduce their reliance on fossil fuels to produce the necessary electricity.