US States Enact Crypto Mining Protection Laws – Cryptopolitan
States around the US are passing legislation defining, licensing and regulating digital assets as the cryptocurrency market drama continues to unfold, characterized by falling asset prices and a series of scandals involving crypto banks, investment firms and exchanges. The states are Mississippi, Missouri, Montana and Oklahoma.
What the state’s regulations entail
The measures will enable Bitcoin to be mined on a small scale in private homes and on a larger scale in places designated for industrial use.
In addition, the proposed rules would make it illegal for local governments to impose restrictions on mining operations via zoning or noise regulations. They would also make it illegal for utilities to create discriminatory power prices that target mining businesses.
The measure proposed in Montana, known as SB 178, goes one step further. When digital assets are used as payment, state and local governments will be prohibited from imposing any additional tax, withholding tax, assessment or fee as a result of this legislation.
Groups concerned about the possible loss of local authority over mining facilities, which are routinely condemned for creating excessive carbon emissions and noise pollution, have expressed their opposition to the measures.
The Montana Environmental Information Center argues that the state Public Service Commission and local governments should not have their regulatory authority curtailed in any way.
A few states are looking at offering tax breaks to commercial mining companies, which have spread rapidly across the United States since China’s government announced in 2021 that it would no longer allow citizens to mine Bitcoin.
SB 1600, which would provide a significant tax credit against large capital expenditures in new mining operations, is now up for consideration in the state of Oklahoma.
Lawmakers will also debate Senate Bill 443 (SB 443), which proposes to direct the state to work with mining companies to decommission abandoned oil and gas wells and use the resulting energy to operate mining facilities.
New Jersey and New York regulations
New Jersey is poised to enact perhaps the most comprehensive regulatory regime in the nation, with bills moving quickly through the state legislature.
The most prominent of these bills is the Digital Asset and Blockchain Technology Act, which creates an expansive licensing process for businesses that accept, store, trade, lend or issue digital assets.
If the bill is passed, it will also impose record-keeping and disclosure obligations on brokers, exchanges and securities firms and give the state new enforcement powers.
The bill would shift primary regulatory authority from the Department of Banking and Insurance to the New Jersey Bureau of Securities, recognizing the increasing complexity of fitting rapidly evolving cryptocurrency businesses within the outdated money transfer framework.
In the case of New York, state lawmakers may expand their already substantial BitLicense rules and the recent ban on Bitcoin mining, according to John Olsen, New York state head of the Blockchain Association.
The 2015 BitLicense rules gave the NY Department of Financial Services the authority to license, regulate, and discipline cryptocurrency businesses and were a breakthrough for state crypto regulators.
The state further angered the industry in November 2022 when Governor Kathy Hochul approved a two-year moratorium on new permits for fossil fuel-powered mining and proof-of-work algorithms.
