Eight US blockchain lobby groups unite ahead of Trump’s crypto-friendly regime

With only a few days left until US President-elect Donald Trump’s second inauguration, cryptocurrency policy groups are preparing to push things into overdrive.

Blockchain associations from eight US states on Tuesday announced the creation of the North American Blockchain Association (NABA), an organization that aims to provide coherent cryptocurrency policy recommendations to the federal government.

“A few years ago [NABA CEO] “Ari Yu and I have led an effort to provide more information and share best practices among state associations,” Lee Bratcher, president of the Texas Blockchain Council and NABA board member, told CoinDesk. “NABA is the formalization of that process in which each state association is independent and retains agency but can work in coordination with other states when necessary.”

Members include the Texas Blockchain Council, the Alabama Blockchain Alliance, the California Blockchain Alliance, the Florida Blockchain Business Association, the Ohio Blockchain Council, the Pennsylvania Blockchain Alliance, the Virginia Blockchain Council, and the Washington Technology Industry Association’s Cascadia Blockchain Council.

Bratcher, a former political science professor and Army officer, founded TBC in 2019. It’s a nonprofit trade association, which means the organization gets its funding through memberships — large companies like Coinbase (COIN) and Galaxy Digital Holdings (GLXY), as well as law firms and banks. Pay the annual fee to be part of the association.

More than half of TBC’s funding comes from Bitcoin (BTC) miners: MARA Holdings (MARA), Riot Platforms (RIOT), Core Scientific (CORZ), Bitmain, and Cipher Mining (CIFR) are among the association’s largest financial contributors.

Bratcher said the incoming Trump administration is unlikely to impact miners in TBC or Texas in a meaningful way. This would be, to some extent, a departure from the Biden regime, which has considered imposing a 30% tax, called DAME, specifically on bitcoin miners. Likewise, the Department of Energy attempted to collect private and confidential information from Bitcoin miners and make that data publicly available, prompting TBC and Riot Platforms to sue them in federal court.

“The only thing the Bitcoin mining industry is asking of the Trump administration is to keep things fair and consistent and apply the same rules to everyone,” Bratcher said. “We feel optimistic that some of the things that were unfair in the Biden administration will no longer happen.”

Texas and the miners

With its unique tax system, massive economy, and abundant energy, Texas has become one of the most popular jurisdictions in the world for Bitcoin miners.

Texas is home to a huge amount of renewable energy projects, and these projects may generate a lot of electricity when demand for it is low — think of a wind farm on a windy night, for example, when everyone is asleep, and consumption is at its lowest. Most often, electricity must be consumed immediately; Transporting electricity from one place to another is also difficult because energy is lost in the process. In other words, Texas goes through periods of high electricity generation and low demand and periods of high demand but insufficient production.

Why has Texas’ energy mix evolved this way? It’s all about subsidies from the federal government, which, according to Bratcher, can reach $30 per megawatt-hour and give a strong incentive to renewable energy companies to develop wind and solar energy. Wind farms have been built in the West Texas Wind Corridor. Recently, the number of solar projects has skyrocketed — from about 2,000 megawatts to 22,000 megawatts statewide in five years, Bratcher said.

Enter Bitcoin mining. Unlike other types of data centers, which need almost 100% uptime, Bitcoin mines can be easily turned on and off. So it adapts well to a network that experiences large fluctuations in demand. “You had a period where miners were able to get wholesale energy prices and do power purchase agreements for very low amounts of money,” Bratcher said.

Bitcoin miners now consume about 3,100 megawatts in Texas, according to Bratcher, which is enough energy to supply… 620,000 homesaccording to data from the Electric Reliability Council of Texas (ERCOT), the state’s grid operator. “Nearly half of all Bitcoin mining in the United States is located in Texas,” Bratcher said.

This explains why TBC gets such a large portion of its funding from Bitcoin miners. In fact, TBC has hired a number of consultants with a particular focus on ERCOT and energy policy, while other types of companies — cryptocurrency exchanges, money transfers — haven’t had the same need.

Will Texas remain friendly towards Bitcoin miners in the coming years? That remains to be seen, Bratcher said. Mining companies aren’t the only ones rushing to take advantage of Texas’ unique network, and there’s now concern among elected officials that demand could end up being too high. TBC estimates that the network will grow at 5% to 6% per year over the next 10 years – a rapid pace compared to 1% or 2% per year in previous times.

However, ERCOT is unlikely to discriminate against bitcoin miners specifically; It is simply concerned with the rate of growth. New bitcoin mining operations are being built alongside new residential and industrial projects, and ultimately account for less than 10% of the expected growth, Bratcher said.

“I guess [ERCOT] “It will set rules for how any large loads are connected to the network, and this will create some new planning requirements for bitcoin miners and other large loads, including data centers and industrial consumers,” Bratcher said.