The Arkansas State House has passed two bills that could potentially result in a prohibition on cryptocurrency mining activities within the state.
These bills are currently in the review phase and have not advanced to full legislation yet. They serve as a basis for further deliberations that may lead to the development of concrete laws.
During a Senate hearing on April 17, lawmakers discussed various concerns such as noise pollution, foreign ownership, and the proximity of cryptocurrency mining operations to residential areas.
Out of the eight bills introduced to the House on the same day, two were successfully enacted, while the Senate approved one bill related to cryptocurrencies in the previous week.
There is considerable debate surrounding the need to revise Act 851 and the extent of the revisions required. Committees will deliberate on the matter before potentially passing legislation in the ongoing fiscal session or the subsequent one.
The Arkansas Data Centers Act of 2023, as outlined in the bill, aims to regulate Bitcoin mining activities in the state by establishing guidelines for miners and protecting them from discriminatory regulations and taxes.
Criticism of Bitcoin mining stems from its extensive energy consumption and resulting waste. Reports indicate that Bitcoin mining produces over 77 kilotons of electronic waste annually.
Beyond the U.S., legal concerns related to crypto mining have emerged. Paraguayan senators have proposed a bill to temporarily ban crypto mining and associated operations in the country, citing power theft and disruptions to the electrical grid by illegal mining facilities.
The proposed legislation aims to limit the establishment of crypto mining facilities and activities involving the creation, storage, and trading of cryptocurrencies.
Despite delays in the mining ban in Paraguay, officials are exploring options to sell surplus energy from the Itaipu hydroelectric project to miners.
Miners are facing pressure due to the upcoming Bitcoin halving this week. Analysts predict that miners could sell around $5 billion worth of Bitcoin in the months following the halving, potentially leading to a period of price stabilization for Bitcoin.
While challenges loom, CEOs of major crypto mining companies like Marathon Digital Holdings, Riot Platforms, and CleanSpark remain positive. These companies’ efficient operations, technological advancements, and the growing demand for cryptocurrencies could help offset an anticipated annual revenue loss of $10 billion resulting from the Bitcoin halving.
The mining firms are optimistic that the rise in demand driven by new spot ETFs will boost Bitcoin’s price enough to counteract the negative impact of the halving. Since their introduction in January by traditional asset management firms, these ETFs have attracted a total net inflow of $12.27 billion, according to data from the crypto finance research platform SoSo Value.
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