Arkansas State House passes bills to limit cryptocurrency mining

The Arkansas State House has approved two bills that could see a ban on crypto mining activities within the state.

At present, the bills are still under consideration and have yet to progress to full-fledged legislation; they establish the framework for further discussions leading to potential legislation.

On April 17, senators held a Senate hearing to discuss general concerns such as noise reduction, foreign ownership, and the closeness of cryptocurrency mining to residential areas.

Two of the eight bills that were introduced to the House on April 17 were successfully enacted, whereas the Senate approved only one bill pertaining to cryptocurrencies last week.

There is a lot of disagreement over whether Act 851 should be revised and how much detail those revisions should include. The committees will discuss the issue before potentially approving legislation during the current fiscal session or the following one.

According to the bill, the Arkansas Data Centers Act of 2023 aims to regulate the Bitcoin mining business in the American state by defining rules for miners and safeguarding them from discriminatory restrictions and taxes.

Bitcoin mining’s lengthy and energy-intensive operation is being criticized for the waste it generates. According to Investopedia, bitcoin mining generates more than 77 kilotons of electrical waste per year.

Crypto mining also poses legal issues outside of the U.S. Paraguay senators submitted a bill to temporarily outlaw crypto mining and associated activities in the South American country, claiming that illegal crypto mines are stealing power and disrupting the electrical supply.

The proposed legislation seeks to restrict the installation of crypto mining facilities as well as operations involving the creation, preservation, storage, and trading of cryptocurrency.

However, Paraguayan senators have stalled work on the mining prohibition, and officials are now evaluating the advantages of selling excess energy from its Itaipu hydroelectric project to miners.

Miners are under pressure due to this week’s scheduled Bitcoin halving. According to Markus Thielen, head of research at 10x Research, miners may liquidate $5 billion worth of Bitcoin in the months following the halving.

“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 in a statement.

Thielen went on to say that this might happen again, with crypto markets facing “a significant challenge in a six-month ‘summer’ lull.”

Despite these challenges, the CEOs of leading crypto mining companies Marathon Digital Holdings, Riot Platforms, and CleanSpark remain optimistic, as earlier reported by crypto.news.

The mining companies’ cost-efficient operations, advanced mining technology, and increased demand for cryptocurrencies are potential compensatory factors for an anticipated $10 billion annual revenue loss due to the upcoming Bitcoin halving.

The mining firms remain hopeful that the surge in demand driven by new spot ETFs will bolster Bitcoin’s price sufficiently to offset the adverse effects of the update. Since their introduction by traditional asset management firms in January, these ETFs have attracted a total cumulative net inflow of $12.27 billion, as per data by crypto finance research platform SoSo Value.