These 10 states are the United States’ most positive on the crypto-economy

Investing in cryptocurrencies is clearly not for the faint of heart. The value of bitcoin has plummeted from its peak last fall, and others have followed similar stomach-breaking paths.

But that does not mean that the revolutionary technology behind them, which opens up innovations such as smart contracts and instant peer-to-peer payments, is not here to stay. Because of this, many states are seeking leadership in this emerging industry.

With that in mind, CNBC’s America’s Top States for Business study – which scores all 50 states on a wide range of competitive features – pays special attention to cryptocurrency during this year’s methodology.

Our crucial Cost of Doing Business category has always included the cost of electricity, a key factor in this power-intensive industry. This year, the category technology and innovation includes a measure of each state’s share of computing power or “hash rate”. And the Business Friendliness category pays special attention to how states regulate this increasingly important industry.

Based on these calculations, these ten states lead.

“It’s happening,” Republican Gov. Greg Abbott said twitret last year. “Texas will be the crypto leader.”

He may be right. Lone Star State is consistently at or near the top for mining capacity, running neck and neck with Georgia. Electricity is affordable even before the special offers available to crypto miners, even though the state’s independent power grid has had problems with reliability. Texas has begun to regulate cryptocurrencies with an eye to give them a solid foundation for growth.

Mining capacity: No. 2

Power cost: No. 16

Regulation: No. 21 (draw)

Mining goes deep Kentucky’s legacy, but these days the state trades coal against crypto. Last year, Democratic Gov. Andy Beshear signed a series of tax breaks for cryptocurrency mining, including the expansion of electricity incentives designated for the use of renewable energy to include the growing industry. The tax breaks are already working to attract miners. The state also began updating its economic regulations to include crypto.

Virginia’s Bureau of Financial Institutions has mostly taken a hands-off approach to regulating cryptocurrency, while keeping residents in the community informed of the risks. In April, Republican Gov. Glenn Youngkin signed a groundbreaking bill that paved the way for banks to hold customers’ cryptocurrencies, provided they have the right risk management tools in place.

Gem State offers the lowest electricity costs in the country, although it has not yet led to a large influx of mining operations. This year, the state adopted the Digital Assets Act, and created a broad framework for regulating cryptocurrency. The new law specifically excludes virtual currencies from regulation under government securities laws.

Low electricity costs are also a plus in Evergreen state. Combine that with a strong technological ecosystem, and it turns out to be a magnet for miners. This year, Democratic Gov. Jay Inslee signed a new law establishing the Washington State Blockchain Work Group with the goal of advancing the new technology and establishing partnerships between the state and industry.

The beehive state makes strict regulations for blockchains, and in March, Republican Gov. Spencer Cox signed a bill that would allow state and local governments to accept payments in the form of digital assets. The state also formed a new blockchain innovation task.

Low costs and smart regulation create Peace Garden State fertile ground for crypto, and the effort can pay off. Last month, the mining company Bitzero announced that it would build its North American headquarters in North Dakota. The company, whose investors include Shark Tanks’ Kevin O’Leary, aims to build an environmentally friendly bitcoin mining operation.

German high-performance computer company Northern Data, which uses its crypto-mining capabilities to create data centers around the world, has chosen Pryor, Oklahoma, east of Tulsa, as its North American headquarters. The Sooner State offers low cost, and the regulations, while there is still work in progress, are friendly.

Another state better known for other types of mining, The cowboy state aims to be the crypto state. Wyoming has enacted dozens of laws to attract industry, including a framework for chartering cryptocurrencies. The state also offers some of the lowest electricity costs in the country. Wyoming Senator Cynthia Lummis (R), who owns crypto, has been a key supporter of DC crypto law

The Cornhusker state takes the lead in cultivating crypto banking, and established its own bank charter regime last year. There is also a mining power plant on the prairie. Minnesota-based Compute North says it chose Kearney, Nebraska, for its giant 100-megawatt data center in 2019 because of “its ideal location in the heart of the United States and its direct access to a variety of energy sources.”