Arkansas State House approves legislation curbing cryptocurrency mining activities
The Arkansas State House has given its approval to two bills that could potentially lead to a ban on crypto mining activities within the state.
Currently, the bills are still being considered and have not yet progressed into full-fledged legislation. They serve as a foundation for further discussions that could result in future legislation.
On April 17, senators held a Senate hearing to address various concerns related to crypto mining, including noise reduction, foreign ownership, and the proximity of mining operations to residential areas.
Out of the eight bills that were introduced to the House on April 17, two were successfully enacted, while the Senate approved only one bill related to cryptocurrencies last week.
There is significant disagreement regarding whether Act 851 should be revised and the level of detail that should be included in those revisions. Committees will discuss the matter before potentially approving legislation during the current fiscal session or the next one.
The Arkansas Data Centers Act of 2023, as outlined in the bill, aims to regulate the Bitcoin mining industry in the state by establishing rules for miners and protecting them from discriminatory restrictions and taxes.
Bitcoin mining has faced criticism due to its lengthy and energy-intensive process, which generates a substantial amount of waste. According to Investopedia, bitcoin mining produces over 77 kilotons of electrical waste annually.
Crypto mining also presents legal challenges outside of the United States. Senators in Paraguay have proposed a bill to temporarily ban crypto mining and related activities in the country, citing illegal mining operations that steal power and disrupt the electrical supply.
The proposed legislation aims to limit the establishment of crypto mining facilities and activities involving the creation, storage, preservation, and trading of cryptocurrency.
However, the mining prohibition in Paraguay has been delayed, and officials are now considering the option of selling excess energy from the Itaipu hydroelectric project to miners.
Miners are facing pressure ahead of this week’s Bitcoin halving. Markus Thielen, head of research at 10x Research, predicts that miners may sell $5 billion worth of Bitcoin in the months following the halving.
Thielen believes that this selling pressure could last for four to six months, resulting in Bitcoin’s price remaining relatively stable during that time, as has been the case after previous halvings. He describes this period as a “significant challenge” for the crypto markets.
Despite these challenges, the CEOs of leading crypto mining companies, Marathon Digital Holdings, Riot Platforms, and CleanSpark, remain optimistic. Their cost-efficient operations, advanced mining technology, and the increasing demand for cryptocurrencies could potentially compensate for an anticipated $10 billion annual revenue loss due to the upcoming Bitcoin halving.
These mining companies are hopeful that the introduction of new spot ETFs will drive up the price of Bitcoin enough to offset the negative effects of the halving. Since their introduction in January, these ETFs have attracted a cumulative net inflow of $12.27 billion, according to data from crypto finance research platform SoSo Value.
In conclusion, the Arkansas State House has approved two bills that could result in a ban on crypto mining activities in the state. The proposed legislation aims to regulate the industry and protect miners from discriminatory restrictions and taxes. Similar concerns have also arisen in Paraguay, where a temporary ban on crypto mining has been proposed. Miners are facing pressure due to the upcoming Bitcoin halving, but some mining companies remain optimistic about the future due to their cost-efficient operations and increased demand for cryptocurrencies.
