In a recent surprising move, Texas, a pro-Bitcoin state in the South Central region of the United States, has flipped its stance and has taken a decisive step toward imposing much stricter regulations on Bitcoin miners.
Sources reveal that Texas lawmakers have taken notice of the enormous amount of energy that Bitcoin requires to maintain its network. Following this on Tuesday, the Texas Senate came one step closer to reaching an agreement about Senate Bill 1751. Sources suggest that the bill received unanimous approval from the Senate before moving to the House and the governor.
The proposed bill seeks to regulate how Bitcoin miners can interact with the power grid, and how their earnings will be taxed. The bill was introduced in the Texas Senate on March 7, by a trio of Republican state senators namely Lois Kolkhurst, Donna Campbell, and Robert Nichols. After being passed in the Senate, the bill would now move to the House and then would require a signature from the governor before it becomes a law.
Notably, this bill stands in clear contrast to the usual pro-crypto attitude that the state authorities have had for years. It is also exactly opposite to the mining bill which was proposed by a Texas lawmaker a few days ago. Todayq News reported that Cody Harris, a Texas House of Representatives member, proposed a Right to Mine bill. Harris asked his fellow lawmakers to rise in support of miners and “express support for protecting individuals who code or develop on the Bitcoin network.”
While New York and a few other states have recently emerged as some of the fiercest anti-crypto states in the country, the implications of the Texas legislation might have a significantly larger impact. It may fundamentally undermine how Bitcoin miners in the state operate.
Texas has a power grid that is completely separate from the rest of the country. In the last few years, it has been in the spotlight for surge pricing and outdated or underprepared hardware. As a result, many residents have started losing power entirely.
Now add energy-intensive mining practices, and the problem gains the potential to become much more acute. 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 aim to ban this kind of relationship, as well as require these companies to coordinate directly with ERCOT in a power emergency. Furthermore, it will curtail any existing tax incentives for blockchain mining companies to move to Texas.
However, miners in Texas also stepped up in times of hardship and calamity. When the weather conditions worsened in December, it led to power outages resulting in a subsequent drop in hash rate by about 35%. At this time, miners in the state were forced to turn off their mining devices.
Following the winter storm, Bitcoin miners helped restore up to 1,500 megawatts of power to the struggling local infrastructure. It was made possible by the state authorities’ supplementary services and the adaptability of mining operations.
On March 28, the Texas State Committee on Business and Commerce heard testimony on the bill, the status of which is currently pending. Lawmakers and states have been largely divided in the US on matters relating to cryptocurrencies.
On one hand, several states have been passing their “Right to Mine” bills, Bitcoin mining in Texas has been controversial, mostly due to the failing power grid. In October, Senator Elizabeth Warren and a group of six other senators asked for data on the energy use and potential environmental effects of Texas-based bitcoin mining facilities.
In the last week of February, the Montana Senate passed a historic bill to help struggling crypto miners from discrimination against mining operations. Prior to this, the Mississippi Senate passed the “Right to Mine” bill which is to protect Bitcoin miners from discrimination and recognizes the potential of the activity to drive economic growth and stabilize the energy grid.