Unacceptable Carbon Footprint
A New York bill banning certain Bitcoin (BTC) mining practices has passed and now requires the approval of Governor Kathy Hochul to become law. At issue is “proof of work” cryptocurrency mining that uses a significant amount of electricity to run mining operations, all while burning fossil-fuels as part of the process. If Hochul signs the bill it would mark the first such ban on blockchain technology infrastructure in the US.
The measure also connects to New York’s state goal of cutting greenhouse emissions by 85% by 2050 in compliance with the Climate Leadership and Community Protection Act.
The bill would only allow proof-of-work mining companies that use 100% renewable energy to expand or renew permits. The Chamber of Digital Commerce notes that members that mine in New York have an 80% sustainable energy mix, which does exceed the estimated global average of 60%. The bill’s opponents contend that crypto miners will leave New York and relocate to other states that have fewer hurdles to their operations, thereby harming the state’s economy.
Others fear New York’s move could become a trend that catches on with other states, with implications for both the industry and the Americans it employs.
Washington Evaluates Environmental Impact
The crypto industry could also be facing headwinds at the federal level. The Biden administration is evaluating Bitcoin mining’s environmental impact as part of a broader effort to limit emissions and address factors contributing to adverse climate change.
Given the US accounts for nearly 40% of the global Bitcoin mining industry, what is decided in New York could be pivotal to the industry, especially if new restrictions establish a standard other states choose to follow.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.