US Mining News: Texas Power Restrictions, Proposed Tax Incentive Cancellation; Russian Media Reports Mining Power has Reached Second in the World

After China's ban on cryptocurrency mining, the United States has long dominated the rankings in terms of Bitcoin hashrate. However, regulatory issues in the U.S. have caused turmoil in the crypto industry. Russian media not only emphasized that their own hashrate has quietly climbed to second place globally, but also believe that U.S. regulations will lead to a redistribution of global hashrate landscape.

US Mining Industry Update 1: Texas Power Restrictions and Tax Incentives Revocation

Texas is known for being crypto-friendly, but the Texas Senate introduced Bill 1751 proposing increased regulation and taxation for "large interruptible power facilities," i.e., mining rigs, under the oversight of the Electric Reliability Council of Texas (ERCOT).

The bill was introduced by three Republican state senators, Lois Kolkhurst, Donna Campbell, and Robert Nichols, on March 7.

As Texas operates its own grid independently and is not subject to federal oversight like the majority of grids, due to a decreasing reliance on fossil fuels, the state has experienced major power outages during severe weather in recent years. ERCOT usually manages these crises by rotating power outages across regions and offers energy credits to businesses affected by the outages.

According to SEC filings, Bitcoin mining company Riot Blockchain received $21.3 million in credits in 2022.

Bill 1751 would limit mining companies' participation in grid support programs, potentially capping participation at below 10%, and also suggests revoking any tax incentives for mining companies relocating to Texas.

Dennis Porter, CEO of the non-profit organization Satoshi Action Fund, stated that the bill would restrict miners' participation in grid balance programs. As no opposition was raised in the Senate committee, the bill is categorized as non-controversial and has a 95% chance of being approved by the Senate.

BREAKING: The anti-#Bitcoin mining bill in Texas just passed through Senate committee uncontested without a single vote in opposition.

— Dennis Porter (@Dennis_Porter_) April 4, 2023

US Mining Industry Update 2: Arkansas Promotes Mining Development

The Arkansas legislature passed the Bitcoin Mining Protection Act under the "2023 Data Center Act," which is now awaiting final approval from the governor.

The bill, introduced by Representative Rick McClure and Senator Joshua Bryant on March 30, requires mining operations to comply with state tax laws, business guidelines, and operate in Arkansas without burdening the grid.

The legislation also prohibits public utility service providers from imposing unreasonable fees on miners and defines terms such as digital assets, mining, and nodes.

US Mining Industry Update 3: Is Russia Catching up to the US?

The Russian business daily reported that Russia's Bitcoin mining hash rate has surpassed China, ranking second globally behind the US.

It remains unconfirmed if Russia's unilateral report is accurate. Previously, the most referenced data from the Cambridge Centre for Alternative Finance (CCAF) was only up to January 2022, where Russia was ranked fifth:

• 37.8%: US (in red)
• 21.1%: China (in yellow)
• 13.2%: Kazakhstan
• 6.48%: Canada
• 4.66%: Russia

Igor Runets, CEO of BitRiver, a hydroelectric mining service provider in Russia, stated that the US mining industry is progressing slowly due to rising electricity costs, declining profits, and reduced tax incentives. Many highly leveraged mining companies are facing bankruptcy or have already gone bankrupt.

The report even suggests that actions by US regulatory agencies will further redistribute global Bitcoin hash power.