The Arkansas State House has passed two bills that could restrict cryptocurrency mining within the state. Although these bills have not yet evolved into full-fledged laws, they lay the groundwork for further discussions leading to potential legislation.
In a Senate hearing on April 17, lawmakers sought to address general concerns such as noise reduction, foreign ownership and the proximity of crypto mines to residential areas.
Two of the eight bills presented to the House on Wednesday passed, even though the Senate only approved one bill last week that addressed cryptocurrencies.
There is considerable debate about whether Act 851 should be amended and the level of detail those amendments should entail. The committees will discuss the matter before potentially passing a law either in the current fiscal session or the next one.
According to the bill, the Arkansas Data Centers Act of 2023 intends to regulate the Bitcoin (BTC) mining industry in the American state, creating guidelines for miners and protecting them from discriminatory regulations and taxes.
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The prolonged and energy-intensive process of Bitcoin mining faces criticism for the waste it generates. Investopedia states that Bitcoin mining produces over 77 kilotons of electrical waste each year.
Crypto mining also presents legal challenges outside the United States. Paraguay lawmakers proposed a bill to temporarily ban crypto mining and related activities in the South American nation, saying illegal crypto mines are stealing power and interrupting the electricity supply.
The proposed legislation aims to prohibit the establishment of crypto mining facilities and activities involving the creation, preservation, storage and trade of cryptocurrencies.
However, Paraguayan senators have halted progress on the mining ban, and officials are now considering the benefits of selling excess energy from its Itaipu hydropower plant to miners.
Miners are facing pressure with this week’s upcoming Bitcoin halving. Miners could liquidate $5 billion worth of Bitcoin BTC in the months after the halving, according to the head of research at 10x Research, Markus Thielen.
“The overhang from this selling could last four to six months, explaining why Bitcoin might go sideways for the next few months — as it has done following past halvings,” he said.
Thielen added that the same could happen again, with crypto markets potentially facing “a significant challenge in a six-month ‘summer’ lull.”
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