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Sweden asks European Union to ban cryptocurrency mining in Europe

In a recently released statement, the Swedish Financial Supervisory Authority proposed a ban on cryptocurrency mining in European Union countries.

Sweden asks European Union to ban cryptocurrency mining in Europe

Sweden asks European Union to ban cryptocurrency mining in Europe

According to the regulator, mining activity for Bitcoin and other cryptoactives based on the Proof of Work (PoW) algorithm could prevent the country and the EU from complying with the Paris Agreement on Climate Change.

The statement was signed by the head of the Financial Supervisory Authority, Erik Thedéen, and the head of the Environmental Protection Agency, Björn Risinger.

In the document, they called for a ban on mining “energy-intensive” digital assets.

According to the authorities, cryptocurrency mining generates emissions of up to 120 million tons of CO2 into the atmosphere per year. That’s equivalent to the carbon footprint of 100 million round-trip flights between Sweden and Thailand.

The agencies also said that there are estimates that Bitcoin and Ethereum together use nearly twice as much electricity as all of Sweden in one year.

In addition, the document highlighted that China’s mining ban has caused miners to migrate to Nordic countries. As a result, there was a significant increase in electricity consumption for mining in these countries.

Even the use of renewable energy by miners is not well regarded by the Swedish regulators:

“Cryptoactive producers want to use more renewable energy and are increasing their presence in the Nordic region. Sweden needs the renewable energy used by cryptoactive producers for the climate transition of our essential services. And increased use by miners threatens our ability to comply with the Paris Agreement. The mining of energy-intensive cryptoactives should therefore be prohibited.”

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In addition to criticizing consumption by mining, the agencies said that the risks of cryptocurrencies for the investor are significant.

At the same time, they claimed that digital assets are commonly used for criminal purposes. They specifically mentioned money laundering, terrorist financing and ransomware payments.

Based on this, regulators urge the EU to consider banning mining via Evidence of Work.

Alternatively, they point out that there are other mining methods that can be used for Bitcoin and Ethereum. As the agencies highlighted, the other methods “estimate to reduce energy consumption by 99.95%”.

Finally, they suggest that cryptoactive companies mined via PoW are not allowed to describe themselves as sustainable

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