Congress has taken new steps to bring oversight to the fast-growing cryptocurrency market with a bill focused on consumer protection and financial stability. 

But as lawmakers move forward, environmental experts are raising questions about what the legislation could mean for the industry's massive energy use. 

What's happening?

In July, House Republican leaders declared a "Crypto Week" as lawmakers pushed several related bills, including the Guiding and Establishing National Innovation from U.S. Stablecoins Act, or GENIUS Act. 

As Inside Climate News reported, the bipartisan measure — which passed the Senate in June and passed by the House and was signed into law in July — creates new oversight for stablecoins, a type of cryptocurrency tied to the value of a real-world asset, such as the U.S. dollar, to reduce volatility. 

President Donald Trump, who has publicly supported crypto and holds an estimated $1 billion in digital assets, per the news outlet, said that he worked with House Republicans to get the bill passed. 

Democratic senators, including Kirsten Gillibrand and Cory Booker, also voiced support for the bill, describing it as a step toward stronger consumer protections and financial stability. 

Why are others concerned about this crypto legislation?

Critics say the legislation overlooks crypto's enormous environmental impact. 

Traditional cryptocurrencies are created or verified through mining, a process that requires powerful computers to run continuously while solving complex equations. Each successful calculation produces new coins, but it also demands massive amounts of energy.

"The more that cryptocurrency generally is legitimized and used, the more crypto mining there will be," said Mandy DeRoche, deputy managing attorney at Earthjustice, per Inside Climate News.

The U.S. Energy Information Administration estimated that crypto mining accounted for as much as 2.3% of all U.S. electricity use in 2023, which the EIA said equaled the annual demand for somewhere between 3 million and 6 million homes. 

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Many mining operations are located in small towns and rural areas, where residents report noise, strain on water resources, and few local benefits. 

Because the GENIUS Act doesn't specify how new stablecoins should be verified, experts worry it could indirectly spur more mining and more pollution.

"They're billion-dollar corporations that just come in, bully [and] steamroll local communities," Jackie Sawicky of the National Coalition Against Cryptomining told Inside Climate News. "There's almost no oversight."

What's being done to address cryptocurrency concerns?

Inside Climate News reported that a cleaner crypto alternative already exists. Instead of mining, some cryptocurrencies use a system called proof of stake, in which validators — people who already hold a stake in the currency — confirm transactions. 

When Ethereum, the second-largest cryptocurrency, switched to proof of stake in 2022, its energy use reportedly dropped by 99.99%. 

Researchers like Adi Wolfson have argued that policymakers should encourage this model. 

"You have here the opportunity to choose," Wolfson said, per Inside Climate News, noting that proof of stake means "less energy, less pollution, less carbon."

Whether Congress's push for regulation drives innovation or deepens crypto's environmental toll will depend on which path the industry — and lawmakers — decide to take.

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