Sweden’s financial and environmental regulators are shocked by the growing energy demand for cryptocurrency mining and recently proposed to ban the use of proof-of-work coin minting within the European Union. Swedish officials believe that this will encourage a move towards more energy-efficient Bitcoin mining, while supporting Sweden and Europe’s transition to climate neutrality. However, a state-owned power company warned that restrictions may have an adverse effect on global carbon emissions.

Swedish authorities claim that expensive Bitcoin will generate more emissions

this appreciation The encrypted assets attract more companies to join the competition to solve the core encryption problems of cryptocurrency mining, and the proof-of-work method is the main reason for its high energy consumption. The above remarks come from a joint statement by Erik Thedéen and Björn Risinger, directors of the Swedish Financial Supervisory Authority and Environmental Protection Agency.

Two officials recently issued a call for a ban on energy-intensive mining of digital currencies across the EU, citing various concerns, including Miner migration Other destinations after arriving in China SuppressFor example, in the Nordic region, their demand for renewable energy may undermine the transition to climate neutrality and efforts to achieve the goals of the Paris Agreement.

Government executives cited different estimates, emphasizing the power-consuming nature of crypto mining. For example, Bitcoin and Ethereum use about twice as much electricity as Sweden, or claim that a medium-sized electric car can travel 1.8 million kilometers to cast a bit. The energy consumed by coins. They further stated:

Our conclusion is that policy measures are needed to address the harm caused by proof-of-work mining methods. The important thing is that both Sweden and the European Union can use our renewable energy to bring the greatest benefit to society as a whole.

Thedéen and Risinger believe that the government has multiple policy options to solve this problem. “For example, Sweden and other countries can tax the energy-intensive production of Bitcoin. Another option is to have a broader exchange around the climate issues related to crypto assets, hoping that this will lead to both producers and investors demanding a shift to demand Mining methods with less energy,” they elaborated.

However, as the demand for encrypted assets continues to grow rapidly, Swedish officials worry that none of these measures will adequately limit the harm to the environment. “Emissions need to stop here and now, and renewable energy needs to be used for the climate transformation of basic services.”

The head of the Swedish regulator called on the European Union to consider a total ban on proof-of-work mining. They insist that other methods can reduce energy consumption by more than 99%. The directors hope that Sweden will stop building new facilities that use energy-intensive coin minting methods. They also proposed prohibiting companies from trading and investing in crypto assets mined through a proof-of-work process to promote the sustainability of themselves and their activities.

The author of the proposal acknowledged that these measures may encourage crypto miners to move to other countries and increase global carbon emissions. Nevertheless, they believe that Sweden and the European Union should set an example for other countries and regions. Thedeen and Risinger emphasized:

Banning proof-of-work mining methods within the European Union may be an important first step towards more use of more energy-efficient cryptocurrency mining methods globally. This also means using our renewable energy sources as efficiently as possible to support the transition to climate neutrality.

according to statement According to data released by Finansinspektionen, the electricity consumption of the Bitcoin mining industry in Sweden has increased significantly, reaching 1 TWh per year. The Swedish regulator calculates that these energy sources are sufficient to meet the electricity needs of at least 200,000 households.

At the same time, the country’s state-owned power generation company Vattenfall defended cryptocurrency mining. It treats Bitcoin extraction as an industrial activity that can actually help power producers overcome some of the challenges they face. Henrik Juhlin, Vattenfall’s director of physical power management, told Swedish public broadcaster SVT that mining has the potential to balance grid loads.

This is the case when electricity supply changes, sometimes exceeding demand, especially in countries like Sweden that are increasingly using renewable energy. Wind and solar power generation depends on factors beyond human control, and the consumption of encrypted farms can act as a buffer when the available power is surplus. Juhlin also warned that a ban on encrypted mining in the EU may actually increase carbon emissions around the world, as the industry may move to areas that rely on fossil fuels such as coal.

Do you think Sweden’s proposal to ban the EU’s proof-of-work crypto mining will be supported by other member states? Share your thoughts on this topic in the comments section below.

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