Arkansas House Restricts Crypto Mining with New Bills

The Arkansas State House has recently passed two bills that have the potential to limit cryptocurrency mining within the state. Although these bills have not yet become laws, they serve as a starting point for further discussions that could lead to future legislation. During a Senate hearing on April 17, lawmakers addressed various concerns surrounding cryptocurrency mining, including noise reduction, foreign ownership, and the proximity of mining operations to residential areas. Out of the eight bills presented to the House, two were passed, despite the Senate only approving one bill related to cryptocurrencies the previous week.

There is an ongoing debate about whether Act 851 should be modified and how detailed any amendments should be. The committees responsible for this matter will engage in further discussions before potentially implementing a law during the current fiscal session or the next one. The objective of the Arkansas Data Centers Act of 2023, according to the bill, is to regulate the Bitcoin mining industry in the state by establishing guidelines for miners and safeguarding them from discriminatory regulations and taxes.

Bitcoin mining has faced criticism due to its extensive energy consumption and the resulting waste it generates. According to Investopedia, Bitcoin mining generates over 77 kilotons of electrical waste annually. Crypto mining also poses legal challenges in other parts of the world. Lawmakers in Paraguay have proposed a bill that would temporarily ban crypto mining and related activities in the country due to concerns about illegal mining operations stealing electricity and disrupting the power supply. The proposed legislation aims to prohibit the establishment of mining facilities and activities involving the creation, storage, preservation, and trade of cryptocurrencies. Progress on the mining ban has been halted by Paraguayan senators, who are now exploring the option of selling excess energy from the Itaipu hydropower plant to miners.

In addition to these regulatory and legal challenges, miners are currently facing pressure due to the upcoming Bitcoin halving, which occurs this week. Markus Thielen, the head of research at 10x Research, predicts that miners could potentially liquidate $5 billion worth of Bitcoin in the months following the halving. Thielen believes that this selling pressure could last for four to six months, resulting in a sideways movement for Bitcoin as observed in previous halvings. He further suggests that the crypto market may face a significant challenge during a six-month lull period.

The Arkansas State House has taken steps to pass bills that could limit cryptocurrency mining within the state. Similar debates and challenges are occurring globally, such as in Paraguay, where legislation to ban crypto mining has been proposed. Miners are anticipating potential selling pressure following the Bitcoin halving, which may impact the crypto market for several months.