Arkansas counties rush to regulate crypto miners’ noise.

Arkansas counties rush to regulate crypto miners' noise.

The Blockchain Industry Faces New Regulations in Arkansas

The blockchain industry is booming, with crypto mining facilities springing up all over the world. However, in the U.S. state of Arkansas, several counties are urgently passing emergency legislation to control noise and other activities related to crypto mining before a new state law comes into effect on August 1. This move follows the passage of a groundbreaking bill that brings crypto mining facilities under the same regulations applied to data centers, providing guidelines for miners and protecting them from discriminatory regulations and taxes.

Rushing to Regulate

Residents of Arkansas barely had time to discuss the new legislation, as it was proposed, discussed in committees, and passed by legislators within a week, from March 30 to April 7. State Representative Rick McClure, the author of the bill, revealed that “no one spoke against this bill in committees or on the legislative floors.” This rapid action reflects the urgency to address the concerns of local communities while also fostering growth in the blockchain industry.

Crypto mining companies in Arkansas, such as Green Digital, GMI Computing, United BitEngine, and Cryptic Farms, are integral to the state’s economic landscape. Their operations, however, have raised issues related to excessive noise levels and the impact on neighbors’ quality of life.

Responding to Noise Complaints

Arkansas local authorities are enacting more rules to address complaints of excessive noise caused by crypto mining facilities operating 24 hours a day. Kris Kendrick, a justice of the peace on Faulkner County’s Quorum Court, voiced concerns, saying, “I don’t have any issues with mining crypto, but just the noise level, the lack of care for our neighbors.” In response, the Association of Arkansas Counties developed a model ordinance that counties can use to regulate noise before the law takes effect.

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County residents have expressed their frustration, highlighting that the noise from crypto mining facilities disrupts their peace and quiet not only during the day but also in the silence of the night. Justice of the Peace Maree Coats emphasizes, “These people can hear this sound 24/7 from their bedrooms.” These concerns have prompted county legislators to take action and implement noise ordinances targeting data centers.

Balancing Regulation with Growth

While the new legislation in Arkansas brings crypto mining facilities under a common regulatory framework, it does not completely prohibit county regulations. However, it prohibits local governments from discriminating against crypto mining facilities and limits restrictions on noise levels to those set for sound pollution in general. The legislation also forbids rezoning areas with the intention or effect of discriminating against digital mining operations.

This balanced approach aims to provide clarity and fairness to both the blockchain industry and local communities. By establishing guidelines for mining operations, the legislation acknowledges the economic benefits brought forth by the industry while ensuring that it operates within reasonable boundaries. Arkansas is presenting itself as a model state that encourages blockchain technology while addressing the concerns of its citizens.

The blockchain industry continues to evolve, and as it does, it must navigate the intersection of regulation and innovation. States like Arkansas are taking proactive steps to strike a balance between fostering a supportive environment for the blockchain industry and protecting the well-being of their communities. By addressing noise concerns and enacting regulations that treat crypto mining facilities on par with data centers, Arkansas is leading the way in responsible blockchain governance.

Arkansas Data Centers Act of 2023. Source: Arkansas State Legislature.

Related Magazine Article: Bitcoin is on a collision course with ‘Net Zero’ promises

Bitcoin and the wider blockchain industry face numerous challenges as they continue to proliferate. Alongside the concerns of noise and environmental sustainability, the digital currency sector is also grappling with the need to align with global ‘Net Zero’ promises. The environmental impact of blockchain operations and its potential implications for the future are being closely examined, raising vital questions for the industry at large.

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