It’s fair to say that 2021 has been quite the year for the crypto industry. The total market cap topped the $1 trillion mark back in February. As well as this, between up to 55 million people currently own cryptocurrency of some form. This rising popularity has led to a worldwide debate around the regulation of cryptocurrency.
Concerns around the financial risks involved with crypto led China to ban the digital asset in October. In addition, many other countries have begun to tighten their grip on crypto by introducing strict regulations.
Now, it seems that Europe may be following in China’s footsteps. Sweden’s recent call for a crypto mining ban across the European Union has been backed by Norway. So, could this mean that we’re a step closer to seeing a crypto ban in Europe?
Why is Norway backing the Swedish crypto ban proposal?
Bitcoin.com recently reported that Norway is considering ways to limit the environmental impact of crypto mining. As a result, the country may support the Swedish plan for a complete ban on crypto mining in Europe.
Norwegian Minister Bjørn Arild Gram explained, “Although crypto mining and its underlying technology might represent some possible benefits in the long run, it is difficult to justify the extensive use of renewable energy today.”
Norway’s recent focus on crypto comes at a time when the Nordic regions are popular destinations for crypto miners. This is because the region has a healthy supply of renewable energy resources and fairly low electricity rates. However, the rise of miners in these regions has caused a multi-fold increase in energy usage that threatens the country’s ability to meet the Paris Agreement’s climate goal.
Gram did not provide any specific details about the regulatory policies the Norwegian government is proposing. However, the European Commission is already encouraging crypto mining operations to move elsewhere.
Could Europe see a crypto ban?
Swedish regulators claim that crypto must be banned in Europe in order to meet the 1.5°C degree climate goal. Environmentalists seeking to reduce the environmental impact of crypto mining support this argument.
Despite this, a complete ban of cryptocurrencies in Europe may be far-fetched. This is because crypto is now becoming widely adopted, and a complete ban would drive innovation away from Europe. Instead, the EU could make crypto operations more sustainable by toughening regulations.
In an interview with Euronews Next, a spokesperson revealed that the European Commission is working to promote “more sustainable forms of blockchain technologies.” The spokesperson added that the Commission has ambitious emission reduction targets. Furthermore, the Commission is promoting less energy-intensive blockchain operations by funding startups and developing a public sector blockchain network.
What will sustainable crypto mining look like?
With sustainable crypto mining, the power needed to mine coins is created using renewable energy sources.
Popular forms of sustainable crypto mining include solar and wind-powered mining. The aim of sustainable crypto mining is to lower the use of fossil fuels.
Countries such as Norway, Iceland and some parts of Africa are rich in renewable energy sources. This makes them attractive options for sustainable crypto miners.
At the recent COP26 meeting, environmentalists expressed their concerns about Bitcoin’s carbon footprint. However, using renewable energy sources to mine the coin could significantly reduce its carbon footprint.
That said, to roll out renewable cryptocurrency operations, more research is needed into reducing the cost of storing renewable energy.
European crypto holders don’t need to worry about a complete ban on crypto just yet. However, they can expect tightened regulations around the sustainability of crypto.
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Ruby is a freelance writer who enjoys writing about all things personal finance. After embarking on her own side hustle journey three years ago, Ruby is passionate about helping others to learn about the ins and outs of persona… Read More
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