Manitoba Puts 18-Month Freeze on New PoW Operations

On Monday, the Manitoba government announced that it is temporarily freezing any new proof-of-work (PoW) mining operations, citing a potential for overwhelming energy demands and low economic return.

However, this 18-month pause in any new connections of crypto operations to the hydroelectric grid will not affect the 37 existing operations in the Canadian province.

“We can’t simply say, ‘Well, anyone can take whatever (energy) they want to take, and we’ll simply build dams,”‘ said Finance Minister Cameron Friesen, who is responsible for Crown-owned Manitoba Hydro. “The last one cost $13 billion if you priced in the (transmission) line.”

This will be a big setback for Canadian crypto miners planning to establish new crypto mining centers. After all, Manitoba is an attractive place for crypto miners due to its second-lowest electricity rates in Canada, behind Quebec. And earlier this month, Hydro-Quebec also announced that it was asking its provincial regulator to suspend the energy allocation process to the crypto industry.

Canada accounts for 6.5% of the Bitcoin mining hash rate, as of Jan. 2022, the 4th largest by country.

The Finance Minister said that the province had received recent requests from another 17 operators that would require 371 megawatts of power. This accounts for more than half the power generated by the Keeyask generating station, a 695-megawatt (MW) hydroelectric generating station that only became fully operational earlier this year.

According to the official website, this station will add 4,400 gigawatt-hours of renewable electricity per year to Manitoba Hydro’s total supply. Meanwhile, Manitoba has also received other less formal inquiries from crypto miners, which would total more than 4,600 megawatts, Friesen said.

According to him, the government is concerned that blockchain operations may not produce many jobs. Meanwhile, Jade Alberts, the vice president of the Canadian Blockchain Consortium, said high-paying jobs are involved in operating the servers and that blockchain operators also have the ability to adapt to the needs of the grid.

New York Signs PoW Mining Ban into Law

Recently, New York pulled a similar move when governor Kathy Hochul signed a two-year moratorium on PoW crypto mining into law last Tuesday.

“I will ensure that New York continues to be the center of financial innovation while also taking important steps to prioritize the protection of our environment,” said Hochul explaining her approval.

The New York State Senate first passed the bill targeting PoW mining in June this year in an effort to address the environmental concerns about cryptocurrencies. A month prior to that, the State Assembly had passed the bill which blocked new crypto mining facilities using non-renewable energy sources from setting up operations in the Empire state.

The crypto industry opposed the bill, warning it might lead to miners relocating, impacting jobs and the U.S.’s “geopolitical interests.” But the advocates of the bill noted that existing facilities, as well as those that tap into 100% renewable resources, would remain unaffected.

The bill was sponsored by Democrat Anna Kelles and imposed a two-year moratorium on not only new crypto-mining firms that use a carbon-based energy source but also those who are already operating in the state by not renewing their licenses.

Meanwhile, New York City mayor Eric Adams, who is a Bitcoin and crypto proponent, is still focused on making the state a crypto hub, according to reports on Nov 25. However, he believes his goal can be combined with the state’s efforts to limit the environmental cost of crypto mining. This comes after Adams said in June that he would ask the governor to veto the bill.

Now, with the bill signed into law, New York City will work with legislators to find a balance between the needs of the legislation and the development of the crypto industry, the politician told The NY Daily News.

Last year, following his election, Adams tweeted that he would take his first three paychecks in crypto and announced his intention to make NYC the “center of the cryptocurrency industry.”

“We must become a welcoming place for all technology. And crypto is part of the overall technology we’re looking at,” Adams said. “The question is: how do we make smart choices so that New York City — and America — is a leader in this new technology?” said Adams.

At 37.8%, the US leads the Bitcoin mining hash rate by country, and this banning of PoW mining activities for two years in the state could prove to be costly and may even drive other states to do the same.

New York has some of the strictest crypto exchange rules in the US, which introduced the BitLicense regulatory regime in 2015. The bill, which applies to crypto organizations involved in buying, selling, exchanging, transferring, or issuing crypto, has been widely criticized by the crypto industry for being hostile to the market.