City officials in Kingsport, Tennessee have approved initial changes to zoning rules that could allow cryptocurrency mining firms and data centres to operate locally.
The Board of Mayor and Aldermen unanimously passed the ordinance on first reading during a Tuesday meeting.
The amendment sets out where crypto mining and data centre facilities may be located within the city.
Final adoption will require a second vote after the proposal was recommended by the city’s planning division in December.
“The City’s industrial district zoning code text was created without the anticipation of mass digitisation,”
The planning commission said, adding that the changes would help properly permit new digital industries.
Under the proposal, crypto mining operations must operate inside fully enclosed buildings.
Mining facilities would also be prohibited within 500 feet of residential buildings or districts.
The ordinance requires crypto miners to meet sound restrictions following a noise impact study.
Noise levels would be capped at 60 A-weighted decibels measured from the property line.
Officials noted that noise complaints have previously triggered legal action against crypto miners in other parts of the United States.
Kingsport is among the 20 most populous cities in Tennessee, increasing the significance of the zoning change.
Tennessee has attracted crypto mining investment in recent years, including facility purchases near Knoxville.
Separately, a Tennessee lawmaker has proposed legislation to allow the state to invest part of its general fund in Bitcoin.
At the time of reporting, Bitcoin price was $89,347.73.