EU Should Ban The “Proof-Of-Work” Crypto Mining, Financial Regulator Said

A top EU financial regulator has called for a bloc-wide “ban” on the “proof-of-work” mining because of its large electric energy consumption.

Erik Thedéen, the Vice-Chair of the European Securities and Markets Authority (ESMA), urged for a bloc-wide ban on “proof-of-work” cryptocurrency mining in an interview with the Financial Times, arguing this industry’s energy use was becoming a “national issue” in Sweden.

“Bitcoin is now a national issue for Sweden because of the amount of renewable energy devoted to mining,” Thedéen said, “it would be an irony if the wind power generated on Sweden’s long coastline would be devoted to Bitcoin mining.”

Erik Thedéen cautioned that proof-of-work mining threatens the international community’s capacity to achieve the Paris agreement’s climate change obligations. He suggested that regulators consider prohibiting “proof-of-work” mining, a very energy-intensive way of mining crypto. Bitcoin and Ethereum, the two biggest cryptocurrencies now, are also using this mining way.

“The solution is to ban proof-of-work,” Thedéen told the Financial Times. “Proof-of-stake has a significantly lower energy profile.”

According to Cambridge’s Bitcoin energy consumption index, the mining process consumes 134.8TWh of energy per year, which is more energy than whole nations like Norway, Sweden, and Ukraine. Currently, Europe does not have a particularly large proportion of the proof-of-work mining industry. As per the Cambridge Centre for Alternative Finance, the United States presently dominates Bitcoin mining (35.4%), Kazakhstan (18.1%), and Russia (11.23%). Furthermore, Ethereum estimates that its planned shift to a proof-of-stake network would reduce energy consumption by 99.95%.

Kosovo banned cryptocurrency mining earlier this month in an effort to solve the energy shortage problem of the country in a decade.

Norwegian officials told Euronews Next in November that they would consider supporting a ban on “proof-of-work” mining, and they were “considering potential policy measures” to deal with the issues created by crypto mining.

Last year, China authorities also tightened the crypto mining industry by listing it as a forbidden activity.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page

Hazel

CoinCu News