Mining cryptocurrency requires enormous amounts of computing power and electricity, both to keep the digital calculations going and to cool the machines doing the work.

A legislator from St. Charles County wants to make it easier for entrepreneurs to set up their mines in Missouri, proposing legislation that prevents local governments from limiting the locations for mining operations or imposing noise restrictions tighter than those for other industries.

The bill filed by state Rep. Phil Christofanelli, a St. Peters Republican, would also bar the Missouri Public Service Commission from agreeing to set power costs for cryptomines above the rates charged to other industries.

The protections are needed, Christofanelli said Tuesday to the House Special Committee on Innovation and Technology, to foster an industry that would bring jobs and money to the Missouri economy.

“Our state should welcome this type of new and innovative currency into the marketplace,” Christofanelli said. “We just want asset miners treated like everybody else in the energy economy.”

Missouri should allow cryptomining but shouldn’t exempt it from local regulations or protect it from a PSC decision that accounts for extra costs of connecting and powering a new heavy electricity user, Michael Berg, state political director for the Sierra Club, told the committee.

“Being next to one of these operations is like constantly having a jet engine idling on a nearby tarmac,” Berg said. “Communities should be allowed to deal with that.”

Under Christofanelli’s bill, which was not voted on Tuesday, anyone in the state could set up a cryptomining operation in their home, “as long as it complies with all local noise ordinances” and those ordinances could not set a noise limit for home cryptomining more restrictive “than other limits for sound pollution.”

Local governments would have to allow cryptocurrency mining in industrial areas and the rules for noise could not be stricter than those for other industries. They would also be prohibited from changing the zoning for a cryptocurrency mine if the intent was to stop the business from operating.

In an exchange with state Rep. Bridget Walsh Moore, a St. Louis Democrat, Christofanelli said local governments could include provisions about cryptocurrency mining in a zoning ordinance but could not exclude the businesses.

“It still seems like we’re tying the hands of local government,” Walsh Moore said.

“Well, that’s what we do here in the legislature,” Christofanelli replied.

Bitcoins, the most recognizable cryptocurrency, as well as others, are generated from what are called blockchains, invented to create secure, encrypted online documents and transactions. Completing a block is rewarded with the currency being mined.

A single computer would take several years to complete a block running the Bitcoin algorithm, but a large bank of computers can do so much more quickly. Completing a block currently earns 6.25 Bitcoins – almost $270,000 based on the Tuesday afternoon market price.

If passed, Missouri would be one of a handful of states with laws protecting cryptomining and preventing local regulation. Arkansas was the first, followed by Montana.

The New York Times, in an article published Saturday, described how residents of a home approximately 100 yards from a cryptomining facility have been driven indoors by the din of loud cooling fans required by the computers that operate around the clock.

The Times also reported that the Arkansas legislation was “written in part by the Satoshi Action Fund, a nonprofit advocacy group based in Mississippi whose co-founder worked in the Trump administration rolling back Obama-era climate policies.”

Dennis Porter,  chief executive of the Satoshi Action Fund, was the first witness in favor of Christofanelli’s bill. He said the bill would promote jobs and investment in local areas, and support privacy in market transactions.

The legislation, he said, “does not ask for special privileges. It only requests that the state allow Bitcoin and digital asset businesses to grow without fear of discrimination.”

Along with noise, large digital currency mining operations require a built-up energy supply, such as new transmission lines and substations, Berg told the committee. Regulators should not be required to spread those costs to other users in electric rates, he said.

“This is not about freedom,” Berg said. “It is about big, wealthy, crypto players who want to make it harder for the PSC to hold them accountable and protect the public.”

Asked after the hearing how local governments could regulate cryptomining operations for noise and other nuisances, Christofanelli said they could use pass ordinances to protect residences.

Most Missouri counties, however, do not have zoning laws. Their powers to pass ordinances are far more limited than municipalities, but Christofanelli said he believed there was sufficient authority to write a general noise ordinance. 

“They can regulate the level of noise,” he said. “I’ve never heard they were unable to do so.”