3 - 5 minute read
The Texas Senate has passed a controversial bill that will place limitations on how much bitcoin miners can participate in demand response programs. Currently, miners get paid to curtail their operations during times of high energy demand, but the new bill aims to limit their participation to 10% and to abolish tax abatements for the industry. If approved by the House, the bill will move on to be signed into law by Texas Governor Greg Abbott.
As the House vote approaches, bitcoin miners have increased their advocacy against the bill. Three lobbying groups, the Texas Blockchain Council, the Chamber of Digital Commerce, and Satoshi Action Fund, have launched a campaign against the bill, saying that it is “anticompetitive.” However, CEO of bitcoin mining firm Marathon Digital Holdings, Fred Thiel, thinks that the bill is unlikely to pass in the House because of the more positive view that they have of bitcoin mining.
Mining provides flexibility in powering on and off and is seen as an asset to the Texas grid by industry members and supporters. By funding energy generation capacity when there is little demand for power, miners have helped turn off power that would otherwise be used for the rest of the grid. But to critics, such as Texas resident Jackie Sawicky, who has organized hundreds of local residents against Riot Platforms, one of the largest miners in the state, this program amounts to subsidies for the miners’ operation.
Texas has been a popular location for bitcoin mining because of its deregulated energy market, which allows miners to negotiate their own contracts with power generators. However, this has led to mining activities consuming a significant amount of the state’s energy. With the new bill, proponents of the legislation aim to cover the costs that are associated with the miners’ activities that go into operating the power grid.
With the push for more environmentally sustainable practices, bitcoin mining in Texas may need to adapt to new regulations. For traders interested in the cryptocurrency market, it is important to keep an eye on the proceedings of the House vote and governor’s decision, as the new legislation may have implications for the state’s mining industry. As regulations change rapidly and unexpectedly, investors should be prepared to move quickly to capitalize on new opportunities and address emerging risks.
The Bottom Line
The Texas Senate passed a bill that limits bitcoin miners’ participation in demand response programs. If approved by the House and signed into law by Texas Governor Greg Abbott, the bill will cap how much miners can participate in such programs and abolish tax abatements for the industry. While the vote in the House may prove contentious, traders interested in the cryptocurrency market should be prepared to move quickly to avoid emerging risks or capitalize on opportunities presented by the evolving regulatory landscape.
