Bitcoin mining spared from ban in Europe
The European Parliament’s Economics and Monetary Affairs Committee has rejected efforts to ban Bitcoin and other energy intensive crypto mining in the region.
While calls have been growing to ban Bitcoin mining with its energy intensive proof-of-work mechanism, these have now been voted against for now at least as European parliamentarians seek to introduce new rules on the regulation of crypto assets.
With its high energy consumption and carbon footprint to match – estimated by some as big as some individual countries – Bitcoin and other crypto currency mining has come under increasing scrutiny over the past year or so, resulting in miners turning to renewables and other efforts to decarbonise the crypto sector.
Nevertheless, the environmental considerations remain and the Commission is to be asked to present a legislative proposal to include in the EU taxonomy (a common classification system) for sustainable activities any crypto-asset mining activities that contribute substantially to climate change, by 1 January 2025.
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The parliamentarians also noted that other industries such as data centres also consume energy resources that are not climate-friendly and the Commission should work on legislation addressing these issues across different sectors.
The banning of an activity such as crypto mining could be controversial, potentially sending it ‘underground’, e.g. into homes where it would not be so visible, or leading to a loss of talent as participants move elsewhere.
China’s banning of crypto mining in Spring 2021 and the move of miners to other countries, instead of an expected reduction in Bitcoin’s carbon footprint, is suggested rather to have increased the footprint as much of the mining in China had been hydropower based.
In a blog post, Paris-based cryptocurrency solution provider Ledger referred to the vote as “an important victory for the future of Web3 and for Europe’s continued ability to lead its development”.
However, it seems that the Bitcoin ban isn’t totally laid to rest as Ledger comments to be already hearing that those who wish to ban Bitcoin are planning to try again in the upcoming plenary vote.
“And, other aspects of [the regulation] remain deeply problematic, particularly its potential to stifle the growth of NFTs and decentralised finance,” the company adds.
Records indicate the countries with the most crypto mining in Europe are currently Germany and Ireland with both at just under 5%, although both are thought to be inflated by VPN or proxy use.
