Swedish regulators call for EU ban on crypto mining, power company defends industry – Mining Bitcoin News

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Alarmed by the growing energy needs of cryptocurrency mining, Swedish financial and environmental regulators recently proposed an EU-wide ban on the minting of working vouchers. Swedish officials believe it would encourage a move towards more energy-efficient bitcoin mining while supporting the transition to climate neutrality in Sweden and Europe. A state-run power company warns, however, that the restrictions could have a negative effect on global carbon emissions.

Expensive Bitcoin Generates More Emissions, Swedish Authorities Say

The growing value of crypto assets is attracting more and more companies to join the competition to solve the cryptocurrency puzzle at the heart of cryptocurrency mining, while the proof of work method is the main reason for its high energy consumption. The remarks come from a joint statement by the CEOs of the Swedish Financial Supervisory Authority and the Environmental Protection Agency, Erik Thedéen and Björn Risinger.

The two officials recently called for a ban on energy-intensive mining of digital currencies in the European Union, citing various concerns, including the migration of minors to other destinations after the Chinese crackdown. In the Nordic region, for example, their appetite for renewables could undermine the transition to climate neutrality and efforts to meet the goals of the Paris Agreement.

Government officials cite different estimates highlighting the energy-hungry nature of crypto mining such as that Bitcoin and Ethereum together use about twice as much electricity as Sweden or the claim that a mid-size electric car can travel 1.8 million kilometers with the energy burnt to hit a single bitcoin. They further specify:

Our conclusion is that policy measures are needed to address the damage caused by the proof-of-work method of extraction. It is important that Sweden and the EU can use our renewables where they provide the most benefit to society as a whole.

Thedéen and Risinger believe that governments have several policy options to resolve the problem. “For example, Sweden and other countries could introduce a tax on the energy-intensive production of bitcoin. Another option is to communicate more widely on climate issues related to crypto-assets, in the hope that this will lead both producers and investors to demand a shift to mining methods that require less energy. », They specify.

However, as demand for crypto assets continues to grow at a rapid pace, Swedish officials fear that none of these measures adequately limit the damage to the environment. “Emissions must stop here and now, and renewable energies must be used for the climate transition of essential services.”

Heads of Swedish regulators have called on the EU to consider a blanket ban on the extraction of proof of work. Other methods, they insist, can reduce energy consumption by more than 99%. The administrators want Sweden to put an end to the creation of new facilities using methods of striking energy-intensive coins. They are also proposing to ban companies from trading and investing in crypto assets mined with a proof of work process to market themselves and promote their business as sustainable.

Such measures could encourage crypto miners to move to other countries and increase global carbon emissions anyway, the proponents admitted. Nevertheless, they believe that Sweden and the EU should set an example for other countries and regions. Thedéen and Risinger point out:

A ban on the proof-of-work method of mining in the EU could be an important first step in a global move towards greater use of more energy-efficient cryptocurrency mining methods. It would also mean that our renewable energy is used as efficiently as possible to support the transition to climate neutrality.

According to the statement released by Finansinspektionen, electricity consumption in the bitcoin mining sector in Sweden has increased significantly, already reaching 1 TWh per year. This amount of energy would be sufficient to meet the electricity needs of at least 200,000 homes, Swedish regulators calculate.

Meanwhile, the country’s state-owned power generation company Vattenfall has championed cryptocurrency mining. He sees bitcoin mining as an industrial activity that can actually help power producers overcome some of the challenges they face. Henrik Juhlin, head of physical power management at Vattenfall, told Swedish public broadcaster SVT that mining has the potential to balance loads on power grids.

This is the case when the supply of electricity varies, sometimes exceeding demand, and is particularly valid for countries like Sweden which increasingly use renewable sources. Wind and solar power generation depends on factors beyond human control, and consumption by crypto farms can act as a buffer at times when there is excess electricity available. Juhlin also warned that a ban on crypto mining in the EU could actually increase carbon emissions around the world, as the industry could relocate to areas reliant on fossil fuels such as coal.

Do you think Sweden’s proposal for an EU ban on proof-of-work cryptocurrency mining will garner support from other member states? Share your thoughts on the subject in the comments section below.

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