The United States of America now accounts for one-third of the global mining Bitcoin computing power. Hence, the U.S. has begun looking into domestic miners and the impact that crypto mining has on the environment. It is worth noting that no finalized regulations in the U.S. specifically target crypto mining.
However, several proposals and discussions are underway in different states in a bid to regulate crypto mining. This article will focus on the crypto mining regulations currently imposed or proposed by the U.S.
The Energy Committee is looking to “clean up crypto”
The U.S. House of Representatives Committee on Energy and Commerce Subcommittee on Oversight and Investigations held a meeting in January 2022 to discuss the externalities of crypto mining.
The meeting was titled “Cleaning up Cryptocurrency: The Energy Impacts of Blockchain .” The hearing focused on the energy used for proof of work crypto mining. During the hearing, the comment highlighted that many policymakers scrutinized cost and energy sources in crypto mining, which would remain their priority.
On Jan. 27, 2022, eight Democratic members, led by Senator Elizabeth Warren, issued letters to crypto mining companies due to their high energy uses. One evident thing is that there will be a larger focus on Bitcoin mining’s sustainability. As the federal government keeps studying crypto mining in the U.S., different states are working on ways of regulating crypto mining.
Meanwhile, the Biden administration seeks to lower mining energy consumption and emissions footprints. This is the first significant move of the U.S. to attain its climate goals and reduce strain on the power grid.
New York bill to ban crypto mining
The New York State Senate passed Senate Bill S6486D in June 2022. The bill was meant to establish a two-year moratorium on crypto mining operations using PoW in the state to address the negative effects of crypto mining. In addition, it would bring a comprehensive generic environmental impact review and suspension of mining operations running on carbon-based power sources.
In addition, the law would illegalize crypto mining in New York State, and large mining operations will be forced to move to look for a more favorable location. However, individual miners will likely not be under law enforcement issues but will need a way to comply with the law to keep operating.
In November 2022, the nation introduced a partial ban on crypto mining after the Governor, Kathy Hochul, signed off on the bill. Following the move, several crypto businesses took their businesses in other states. However, it did not affect crypto mining using power from the electric grid.
Oklahoma and Kentucky are looking to attract miners
The Oklahoma Senate passed Bill 590 in 2022. The bill was looking to bring about the Commercial Digital Asset Mining Act that will give tax exemptions for some crypto mining equipment and machinery sales. The bill will attract miners who previously preferred New York and Texas, among other states, by providing cheap power and favorable regulations.
State Senator John Montgomery (R-Lawton), who sponsored the bill, mentioned that it is time the state recognized that digital currency block reward mining is growing and will remain for a long time. In addition, he added that he was eyeing tax incentives of about $5 million for miners.
Meanwhile, Kentucky has also enacted similar tax exemptions for crypto miners and mining facilities.
Montana state working to protect miners
Montana state is a popular crypto mining location owing to the favorable climate conditions to cool mining equipment and low electricity rates. In addition, the state has facilitated the development of the crypto industry and saw several blockchain-related companies start up.
Montana state officially passed a bill to protect mining rights on Feb. 23, 2023. The bill was directed toward preventing discrimination against mining operations. It will help struggling miners earn amid increased inflation and an unstable crypto market.
In addition, the bill will see to it that miners are protected from burdensome regulations that could render mining unprofitable.
Crypto mining legality in the U.S.
Cryptocurrency mining is legal in the U.S. in every state. However, different states may impose crypto mining limits. Some states have reported concerns about energy use during crypto mining.
For example, New York became the first state to conduct a two-year moratorium on crypto mining. The legislation focuses on freezing permit issuance and renewal for power plants using fuel to power mining companies.
As for other countries, some still support crypto mining, while others have banned mining. Initially, China brought about the need to ban Bitcoin mining in 2019. However, it was only imposed in 2021, along with other severe regulations in the crypto industry. BTC was around $55k at the time but fell to $30k after the ban was announced.
Other countries that have banned Bitcoin mining include Algeria, Iran, Egypt, Indonesia, India, Bolivia, and Colombia. For some countries, other cryptos were also banned.
The U.S. government has no finalized stance on crypto mining, but different states are introducing new laws to investigate crypto mining issues. As the industry keeps evolving, regulators will have to strike a balance to allow the necessary flexibility for the industry’s growth. In the meantime, crypto miners will have to wait and enjoy the freedom in regions yet to ban crypto mining.