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Texas Senate Passes Bill to Limit Bitcoin Miners' Participation in Demand Response Programs

The state of Texas in the US passed a bill on 16 May 2021 that limits the eligibility of Bitcoin miners to participate in demand response programmes. These programmes reward users for reducing their electricity usage during times of high demand on the grid, contributing to grid stability.

The bill seeks to exclude “mining for cryptocurrency or other commercial high-energy-consuming data processing” from being recognised as demand response resources. This effectively bars Bitcoin miners from accessing the compensation schemes.

The Texas power grid was hit by a major outage in February 2021, which resulted in widespread power cuts and blackouts. The event was partly attributed to the increased demand for electricity by Bitcoin miners in the state.

Several Bitcoin mining companies have since taken steps to ensure that their operations are less reliant on Chinese components and suppliers in light of the country’s recent crackdown on the sector. Some players in the US have also expressed a desire to reduce their carbon footprint by using renewable energy sources for their operations.

The new Texas bill will likely lead to increased scrutiny of the environmental effects of cryptocurrency mining in the state, and may result in tighter regulations on the industry in the future. This could potentially have far-reaching implications for the global cryptocurrency sector, depending on how other countries respond to the issue.

Some cryptocurrency advocates have argued that Bitcoin mining can contribute to the development of renewable energy infrastructure, as it provides a valuable use case for excess energy that would otherwise go to waste. However, it remains to be seen whether this argument will hold sway as more stakeholders begin to scrutinise the environmental impacts of the industry.

Overall, the passing of the Texas bill represents a significant development in the regulation of cryptocurrency mining, and is likely to have ripple effects throughout the global market. The sector will need to adapt to these changes in order to remain viable in the long term.

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