Arkansas House Approves Crypto Mining Restrictions – CM
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Arkansas House Approves Crypto Mining Restrictions – CM

Recently, the Arkansas State House approved two legislation aimed at limiting cryptocurrency mining operations in the state.

Meanwhile, six additional measures did not receive sufficient support to move forward. Although these bills are not yet enacted into law, they mark the beginning of conversations that could result in more regulations.

Arkansas Senate Tackles Issues Related to Cryptocurrency Mining

On April 17, during a Senate hearing, various issues related to cryptocurrency mining were discussed, including concerns about noise, foreign ownership, and how close these mining operations are to living areas. The focus was on modifying the Arkansas Data Centers Act, Act 851 of 2023, to oversee the Bitcoin mining sector within the state. This act is designed to provide regulations for mining activities while protecting them from unfair regulations and taxes. A two-thirds majority in both legislative chambers was necessary to introduce these amendments during the fiscal session. The Senate managed to pass all eight proposed resolutions with the required votes. Still, in the House, six resolutions proposed by Representative Josh Miller from Heber Springs did not achieve the 67 votes needed for approval.

Proposals that did not pass included initiatives to restrict the use of computers or software made abroad in cryptocurrency mining, to allow local governments to regulate mining operations, and to introduce state licensing for miners as part of money transmission regulations.

In the House, two measures were successfully passed. The initial one, championed by Sen. Joshua Bryant from Rogers and Rep. Rick McClure from Malvern, both Republicans, establishes sound level restrictions for cryptocurrency mining operations and limits ownership by specific foreign nations. The second measure, put forward by Rep. Jeremiah Moore, a Republican from Clarendon, requires cryptocurrency mining operations to obtain a license, which will be regulated by the state’s Department of Energy and Environment. Some consider these measures, receiving 80 and 84 affirmative votes, respectively, to support the cryptocurrency mining sector in Arkansas.

Environmental Concerns with Bitcoin Mining 

The environmental concerns surrounding Bitcoin mining are escalating due to the considerable electronic waste produced by the activity. Investopedia reports that Bitcoin mining generates more than 77 kilotons of electronic waste annually. Further, analyses have shown that each dollar of Bitcoin mined in 2018 cost the US economy $0.49 and the Chinese economy $0.37 in economic damages.

In Arkansas, crypto mining operations have raised issues related to noise pollution, ownership by foreign entities, and potential risks to national security. Despite these hurdles, an active legislative discussion is aimed at refining the state’s regulatory landscape for cryptocurrency mining.

Crypto mining is encountering legal obstacles in countries other than the United States. In Paraguay, for example, legislators have introduced a bill to temporarily prohibit crypto mining due to worries that unauthorized mining activities would consume excessive electricity and affect power distribution.