ALBANY, N.Y.—The New York Department of Financial Services (NYDFS) has sent a letter to all regulated crypto companies saying it expects them to start assessing risks associated with climate change and develop possible methods for mitigation.
Notably, the letter follows similar guidelines that were shared by the NYDFS for the state’s insurance providers earlier this year in September, BTC Manager reported.
The letter noted that each rise of one-degree Celsius in global temperature leads to damages worth 1.2% of the U.S. GDP. It further added that reduced economic output in communities hit harder by climate change could also lead to an increase in default rates, reduced lending activity, devalued assets, and losses.
Additionally, it noted that flood risk could substantially impact regional and community banks in particular.
In regard to cryptocurrency businesses, the letter noted studies suggest that the environmental impact of mining cryptocurrencies like Bitcoin can be enormous, BTC Manager said.