In 2015, when New York unveiled the BitLicense, a regulatory framework for Bitcoin and cryptocurrency, there was great fanfare among lawmakers. For innovators and entrepreneurs, however, that began what many labeled the “Great Bitcoin Exodus”.
And though it has been reformed since, much of the cryptocurrency space has walled off the Empire State because of the exhaustive regulations, leaving many customers unable to use a host of exchanges, brokerages, and other services. Residents were even prohibited from buying the much anticipated NYCCoin that launched last year.
Though some exchanges and brokers have applied and received the license — usually those armed with lawyers and staffed by former regulators — New Yorkers are still left out of most of the innovation happening with cryptocurrencies. Miners, however, decided to stay.
Bitcoin mining firms have scooped up abandoned plants in Niagara Falls, Buffalo, and more, using hydropower and natural gas to power the computers needed to “unlock” Bitcoin from the network. Regulators, however, are once again keen to put the screws to crypto.
A bill awaiting its fate in the Senate would impose a two-year moratorium on crypto mining permits, and launch an expansive environmental review.
As a consumer advocate, I view this bill as a death blow to the Bitcoin and cryptocurrency industry, risking jobs and capital that could otherwise scale up renewable energy, and would deny the benefits of crypto and Bitcoin to consumers.
Embracing climate goals to ensure 100% renewable energy usage in mining is well-intended, but a complete ban would have consequences. It will be yet another signal to entrepreneurs and consumers that Bitcoin and other cryptocurrencies are not welcome in New York, and the regulatory framework is too unfavorable to justify investing here.
For people feeling the impact of inflation, and for those who are locked out of the traditional finance and banking sector, their choices will become even more limited.
I understand the rise of cryptocurrency mining raises questions for residents, particularly when it involves the economy and environment. However, a more prudent path would be an environmental review conducted by relevant authorities, rather than a wholesale ban and moratorium that would put many projects in jeopardy.
When it comes to public policy on Bitcoin and cryptocurrency, I would rather side with financial inclusion and crypto innovation than a “Not In My Backyard” mentality.
New Yorkers deserve better: a choice of whether they want to participate in the crypto revolution, rather than have their lawmakers make that choice for them.
Yaël Ossowski is deputy director of the Consumer Choice Center