Texas Steps Closer To Cutting Incentives for Bitcoin Miners

Texas lawmakers have unanimously approved a bill that would unwind tax breaks for local bitcoin mining operations

article-image

GreenBelka/Shutterstock, modified by Blockworks

share

A Texas Senate committee has moved forward on a bill could make the state less attractive for bitcoin miners.

The bill, sponsored by Republican state senators Lois Kolkhorst, Donna Campbell and Robert Nichols, aims to nix tax breaks and demands miners using more than 10 megawatts (MWs) to register as flexible load operators with state grid operator ERCOT.

Lawmakers in the state unanimously approved Senate Bill 1751 in a 10-0 vote on April 4. 

Texas is considered one of the largest hubs in the world for bitcoin mining, owing to its deregulated grid, low electricity prices and renewable energy options. Lawmakers pitched the state as a friendly alternative to mining operations exiled by China’s ban in 2021.

Bitcoin miners across Texas are using 75% more power than last year, around 2,100 MW, Reuters reported citing figures from Texas Blockchain Council president Lee Bratcher. That’s about 3.7% of the lowest forecast peak load and almost triple power used in 2021.

Texas’ grid has suffered deadly outages during heat waves and wintery storms over the past few years, making consistent energy supply a hot-button issue for local voters. Under current conditions, miners are rewarded for shutting down when demand is high, so that the power gets redirected to the grid.

A key provision of the new bill restricts miners’ participation in that demand response scheme to just 10% of the total program.

Riot Blockchain, one of the most prominent Texas-based crypto miners, is among firms that benefited from the state’s incentives. Last year, the miner raked in as much as $9.5 million in power credits because it shut down its rigs multiple times.

Dennis Porter, CEO of bitcoin mining advocacy firm Satoshi Action Fund, tweeted that the bill will eliminate incentives for miners to create jobs in rural communities.

“Unfortunately members of the committee were swayed by the influence of the powerful bill sponsor,” Porter said. “There is talk it could also pass through the Senate. It will be critical to fight back against the bill in the House in order to kill the bill.”

The bill is next headed to the Texas Senate for a floor vote before it moves on to the House.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Research Report Templates.png

Research

An overview of the Base Ecosystem, with a focus on market leaders.

article-image

Although bitcoin hitting $120k by year’s end is looking unlikely

article-image

About 270 million HYPE has been claimed, valued around $7.6 billion

article-image

Stanford professors David Mazières and Dan Boneh will lead the lab alongside a cohort of graduate student researchers

article-image

With more companies holding BTC, bitcoin yielding strategies could become “a new corporate finance norm,” CoinShares posed

article-image

The proposal comes after Polygon governance considered a controversial use of bridged liquidity for yield

article-image

Can the community balance its decentralized ethos with the need for inclusivity and constructive debate?