It’s not just the White House. The European Commission is also considering blocking cryptocurrency mining and Senator Elizabeth Warren (D‑MA) sent a similar message to the industry by initiating an investigation into cryptocurrency businesses operating in Texas. While these calls to ban cryptocurrency mining are often in the name of climate change, it is unclear whether banning the industry would help reach climate goals—especially given the ease at which miners can move. Advocates also argue that mining is becoming more energy efficient and the industry is looking to employ more renewable energy resources.
Despite the White House’s hostile approach and Senator Warren’s stated disapproval, other politicians have taken a different perspective of the industry. Both Texas Governor Greg Abbott and Senator Ted Cruz (R‑TX) have continued to welcome cryptocurrency mining investment in the state. But even without their support, Texas’s deregulated power grid has made the state a hotspot for miners. Similarly to Texas’s Governor Abbott and Senator Cruz, Senator Cynthia Lummis (R‑WY) has been vocal in her support for the cryptocurrency industry in both legislation and the media, but also the state’s favorable laws and regulations make it an attractive place to invest.
These two states illustrate the importance of jurisdictional competition—favorable tax and regulatory environments encourage investment in those states over others. This idea extends to the global level, as evidenced by China’s ban on cryptocurrency transactions and mining as the industry simply moved to places it could survive and grow. If the United States and European Union followed suit, it would quickly send the nascent cryptocurrency industry (and its investment in the economy) across borders once again.
[If we had a rational energy policy, we’d have no trouble accommodating it, either. That doesn’t necessarily make crypto a great investment, but that’s a choice for people to make with their own money. — Ed]
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