New York has become the first state in the nation to restrict cryptocurrency mining.
Gov. Kathy Hochul signed a law that temporarily restricts crypto mining in the state citing “environmental concerns.”
The bill was signed on Tuesday after being passed by the state legislature back in June.
“I will ensure that New York continues to be the center of financial innovation, while also taking important steps to prioritize the protection of our environment,” Hochul said in a statement.
The Associated Press reports that “the new law sets 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.”
“The law also requires the Department of Environmental Conservation to asses how cryptomining affects the state’s ability to meet its climate goals,” the report continues. “Environmentalists said New York was undermining those goals by letting cryptomining operations run their own natural gas-burning power plants.”
Crypto activists argued that the bill hinders financial growth in the state while ignoring other industries that utilize fossil fuels.
“Cryptocurrency mining requires specialized computers that consume large amounts of energy. One study calculated that as of November 2018, bitcoin’s annual electricity consumption was comparable to Hong Kong’s in 2019, according to the U.S. Energy Information Administration,” the AP report noted.