Regulator Reiterates Call for EU Ban on Proof-of-Work Mining

The EU ought to prohibit proof-of-work crypto mining, an government on the European securities watchdog has insisted. Coins counting on the energy-intensive methodology of minting pose a threat to efforts geared toward assembly local weather change objectives corresponding to these set within the Paris Agreement, the regulator says.

Bitcoin Mining Now Attacked in EU for Burning Too Much Renewable Energy

A high-ranking monetary regulator has reiterated a name for an EU-wide ban on cryptocurrency mining based mostly on the proof-of-work idea. The power-hungry mannequin employed within the minting of main cryptocurrencies like bitcoin — in addition to ethereum at this level — has been blamed for utilizing rising quantities of renewable vitality, allegedly slowing down local weather transition in different sectors.

Speaking to the Financial Times, the Vice-Chair of the European Securities and Markets Authority Erik Thedéen said that regulators on the Old Continent ought to think about banning proof-of-work mining and attempt to steer the business in the direction of the much less energy-intensive proof-of-stake methodology. This, in accordance with the ESMA official, will decrease its big energy consumption.

Thedéen, who additionally serves as director-general of Sweden’s Financial Services Authority, famous that bitcoin mining has turn out to be a “nationwide difficulty” for his personal nation. In November, he and Björn Risinger, head of the Swedish Environmental Protection Agency, singled out proof-of-work mining as the principle motive for bitcoin’s excessive vitality utilization and issued the preliminary name for a ban within the EU.

“The answer is to ban proof of labor,” Thedéen has now insisted once more, emphasizing that proof-of-stake has a considerably decrease vitality profile. “We must have a dialogue about shifting the business to a extra environment friendly expertise,” the regulator elaborated. Thedéen was clear, nonetheless, that he was not advocating a large crypto prohibition.

Cryptocurrency mining has been criticized for its rising influence on the surroundings. Last May, China — which on the time had the biggest share of the worldwide hashrate — launched a crackdown on the business following President Xi Jinping’s pledge to attain carbon neutrality. Miners have been working to extend the proportion of renewable vitality within the combine that powers their {hardware}. However, Erik Thedéen says:

It can be an irony if the wind energy generated on Sweden’s lengthy shoreline can be dedicated to bitcoin mining.

Mining firms have been relocating to nations with developed wind and solar energy producing capacities corresponding to Sweden and Norway, which mulls backing the Swedish proposal. Thedéen now warns that if authorities fail to intervene, a big quantity of renewable vitality would go in the direction of minting digital currencies as an alternative of serving to conventional companies transfer away from coal-powered vitality sources.

Do you assume the EU will reply to Sweden’s name and ban proof-of-work crypto mining? Share your expectations within the feedback part under.