Why New York Wants To Launch A Two-Year Moratorium On Bitcoin Mining

The state of New York has taken a step closer to becoming the first in the United States to effectively institute a moratorium on Bitcoin mining.

New York state senators passed a law late Thursday that would freeze cryptocurrency mining statewide for two years. The law takes aim at the proof-of-work authentication that undergirds much of the blockchain infrastructure behind Bitcoin, but which produces an excess amount of carbon emissions because of the massive processing power it requires.

The law also includes several other measures that are unpopular with the crypto community. One requires future miners to produce an environmental impact study for state regulators. Another creates approximately 250 BitLicenses, a controversial business permit required in New York for cryptocurrency miners to operate in the state.

New York is targeting this sector as a way to help the state achieve its clean energy goals. Proof-of-work mining is carbon intensive and a number of operators in New York have relied on converted fossil-fuel plants to generate the processing power needed to create Bitcoin and other cryptocurrencies.

Climate and environmental activists praised New York for moving this bill forward. Liz Moran, the New York Policy Advocate for the environmental nonprofit EarthJustice, proudly declared the bill's passage a victory and that it would enable New York to "keep its status as a leader on the frontier to beat back the climate crisis."

"We applaud the [New York] Senate for passing this bill," Moran said in a statement. "Governor Hochul should not hesitate to sign this bill into law."

If signed into law by Gov. Kathy Hochul, the bill would be perhaps the most serious attempt to curb the cryptocurrency industry in any state. Hochul, who is up for reelection in November, has not staked out a clear position on cryptocurrency mining, though she has pledged to continue New York’s path towards a greener future.

However, Hochul has accepted donations from cryptocurrency executives as part of her campaign, including one who operates a former aluminum plant turned crypto-mining facility, according to the New York Times.