In an effort to address some of the environmental concerns surrounding cryptocurrencies, the New York State Senate passed a bill targeting proof-of-work (PoW) mining early Friday morning.
The bill, which was passed by the state Assembly last month, would put a two-year moratorium on any new carbon-based fuel-powered PoW mining projects in the Empire State, though existing mining companies or those in the process of renewing their permits would be allowed to continue operating. The bill passed the Senate with a 36-27 vote.
During the moratorium, the state will conduct a study on the potential environmental impacts of proof-of-work mining.
Many expected the bill to die in committee – the fate met by last year’s version of the bill – after the Senate Environmental Conservation Committee declined to consider the bill during its last meeting of the session. The committee’s chair, Sen. Todd Kaminsky, told CoinDesk in May that he was worried the bill could lead to “deleterious economic consequences for New York if people perceive it as being hostile to crypto.”
However, an eleventh hour referral of the bill from the Environmental Conservation Committee to the Senate Energy and Telecommunications Committee (which is chaired by the bill’s sponsor, Senator Parker) on Thursday evening meant that the bill was able to reach the full Senate floor for a vote mere hours before the close of the legislative session at midnight.
New York Governor Kathy Hochul still needs to sign the bill before it can become law.
New York has long been seen as a place for crypto mining firms to set up due to cheap hydroelectric energy sources. In more recent years, mining firms have also repurposed defunct coal power generation facilities. Greenidge Generation, for example, huhrefurbished one such facility to operate using natural gas.
The crypto industry rallied against the bill after its Assembly counterpart was introduced last May, with many industry advocates calling the proposal a “ban” on mining outright.
John Olsen, a lobbyist with the Bitcoin Association, told CoinDesk last month that he feared the moratorium could be extended or turned into a ban over the course of the next two years, which could drive away companies seeking to set up shop near New York’s cheap energy sources.
Mining companies based in New York have threatened to leave the state if the moratorium is passed, pointing to the comparative ease of doing business in more mining-friendly states like Texas.
Clark Vaccaro, the acting president and chief strategy officer at industry trade organization BaSIC, told CoinDesk the passage of the bill “is a grim day for blockchain technology, effectively shutting the door on a nascent industry.”
Separately, the Senate passed a bill that would create a “cryptocurrency and blockchain study task force” early Friday.