3 - 5 minute read
Crypto enthusiasts, industry leaders, and state lawmakers gathered at the Texas Capitol in Austin on April 25, 2023, to discuss the possible future of Bitcoin (BTC) mining in the Lone Star State. The rally was organized by crypto advocacy groups, Chamber of Digital Commerce, Satoshi Action Fund, and Texas Blockchain Council, to show Texas lawmakers they were against legislation targeting crypto mining firms.
The proposed legislation, Senate Bill 1751, would amend sections of Texas’ utilities and tax code to add restrictions for crypto mining companies. The bill has passed the Texas Senate Committee on Business and Commerce as well as through a vote on the Senate floor. As of April 24, 2023, the state’s House of Representatives had conducted a first reading of the legislation, whereupon it moved to the Committee on State Affairs.
Under the current version of SB 1751, crypto mining firms participating in a program intended to compensate them for load reductions on the state’s power grid through the Electric Reliability Council of Texas would have their incentives capped at 10%. In addition, certain companies operating data centers would also not receive an abatement on state taxes starting in September 2023.
“The fights about mining aren’t really about mining,” said Perianne Boring, CEO of the Chamber of Digital Commerce. “It’s not really about environmental concerns. What it’s really about is controlling energy use.” She clarified, “Bitcoin mining is a way for regulators to set a new precedent to say who is allowed to purchase energy, who is allowed to purchase power and how you are allowed to use it in a free society.”
If passed, the bill could potentially threaten mining operations for many firms in Texas, a major player in the BTC hash rate following China’s crackdown. Riot Platforms and White Rock Management run mining rigs in Texas. However, Argo Blockchain and Mawson Infrastructure Group have announced plans to sell their Texas facilities to Galaxy Digital and a Singapore-based fund manager, respectively.
Satoshi Action Fund CEO Dennis Porter said he had been monitoring the movement of the Texas bill, discussing its potential impact with local lawmakers. According to Porter, who advocates for pro-crypto legislation with policymakers across the United States, much of the pushback on mining is usually at the county level rather than state.
“When you target one industry the way they are with this bill, that’s bad policy no matter what the industry you’re targeting,” Porter said. “It’s not a ban [like New York’s] but it is very much limiting the space and will hurt the growth of Bitcoin mining.”
The Bottom Line
The proposed legislation targeting crypto mining firms in Texas could potentially threaten mining operations for many firms and limit the growth of Bitcoin mining. If passed, Senate Bill 1751 could discourage investors from coming into the state. The fight against the bill is not just about mining but also about controlling energy use, according to Perianne Boring, CEO of the Chamber of Digital Commerce. Satoshi Action Fund CEO Dennis Porter believes that targeting one industry in this way is bad policy and will hurt the growth of Bitcoin mining.
