Clarification of regulations on cryptocurrency mining
The US House of Representatives in Arkansas passed a bill on the 7th to clarify the regulation of crypto asset (virtual currency) mining.
The Arkansas Data Center Act of 2023 is intended to create guidelines for crypto mining companies and protect the industry from discriminatory overregulation and taxes.
The bill was introduced on March 30 by Sen. Joshua Bryant of the state. It passed the Senate on April 6th and the House on April 7th. The bill, which passed quickly in both houses, is now awaiting the governor’s signature.
The bill explains its intent as follows:
(1) Recognize that data centers create jobs, pay taxes, and bring economic value to our communities and the state of Arkansas;
(2) Clarify guidelines to protect cryptocurrency mining operators from discriminatory regulations and taxation.
The bill would allow businesses to operate in Arkansas as long as they comply with “state laws regarding business policies and taxes, business and safety codes, public service regulations and fees, and federal employment laws.”
As a condition, it also included a provision that it should be operated in a manner that does not impose a load on the local power or transmission grid. The bill also mentions individual cryptocurrency miners. Arkansas-based nodes may be used for mining in private residences, subject to utility company regulations and rates.
Furthermore, it stipulates that virtual currency mining businesses should not discriminately limit the areas in which they can operate, or set unfair discriminatory fees for public services.
Dennis Porter, CEO of the Satoshi Action Fund, a nonprofit that promotes Bitcoin (BTC), commented on the bill’s passing:
The state of Arkansas has pulled off a surprise victory and become the first in the nation to pass the ‘Right to Mine’ #Bitcoin bill in both the House and Senate.
I hope to join @SarahHuckabee for the signing ceremony soon.
—Dennis Porter (@Dennis_Porter_) April 8, 2023
Arkansas successfully passed the bill. It was the first time in the United States to pass a bill that included “the right to mine cryptocurrencies.”
Texas Considers Bill to Withdraw Incentives
On the other hand, in Texas, where cryptocurrency mining is thriving, the Senate has just passed a bill restricting preferential treatment for cryptocurrency mining operators. It will now be debated in the House of Commons.
Texas has a scheme that rewards eligible businesses for saving electricity when demand is tight. Until now, virtual currency mining businesses were also covered, but the bill will exclude them in the future.
For example, mining company Riot blockchain suspended mining operations in February 2022 following a request from the state of Texas during a time of tight power demand. As a result, about 1.3 billion yen (about 9.5 million dollars) of electricity credits were obtained as a reward.
The Texas bill would also remove tax incentives for cryptocurrency miners.
Rep. Lois Kolkhorst, who introduced the bill, said, “The cryptocurrency mining industry is already expected to grow significantly in Texas, so there is no need to subsidize its growth.” bottom.
What is mining
A “mining” action that verifies and approves transactions of PoW currencies such as Bitcoin. Validating a transaction requires a huge amount of computation on a computer, and in return you get a reward if you succeed in mining. A mechanism in which virtual currency is newly issued through payment of rewards. This series of operations is similar to mineral mining, so it is called mining, and is sometimes written as “mining” in Japanese.