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Texas has taken a decisive step toward imposing much stricter regulations on Bitcoin miners. Will other states follow?
Bitcoin requires a ton of energy to maintain its network, and Texas lawmakers have taken notice. Today, the Texas Senate came one step closer to reaching an agreement about Senate Bill 1751, which will regulate how Bitcoin miners can interact with the power grid, and how their earnings will be taxed. Introduced in the Texas Senate on March 7, the bill’s sponsors are a trio of GOP state senators, Lois Kolkhurst, Donna Campbell, and Robert Nichols.
While New York and other states have recently emerged as some of the fiercest anti-crypto jurisdictions in the country, the implications of the Texas legislation go far indeed. It may fundamentally undermine how Bitcoin miners in the state operate.
The state has a power grid that is wholly separate from the rest of the country. In the last few years, it has made headlines for surge pricing and outdated or underprepared hardware. As a result, many homes are losing power entirely. Now add energy-intensive mining practices, and the problem gains the potential to become much more acute.
Scarce Supply
At present, companies like Riot Platforms–a 100-acre facility based in Rockdale–use so much energy that when electricity is in short supply, the Electric Reliability Council of Texas (ERCOT) pays them to limit their energy use.
SB 1751 will ban this kind of relationship, as well as require these companies to coordinate directly with ERCOT in a power emergency. Furthermore, it will curtain any existing tax incentives for blockchain mining companies to move to Texas.
On March 28, the Texas State Committee on Business and Commerce heard testimony on the bill. Its status is currently pending.
The Texas Bitcoin Foundation did not respond by press time to a request for comment.