The European Union is actively considering measures to address the environmental impact of cryptocurrency mining, particularly focusing on the high-energy consumption associated with these activities. Recent discussions have spotlighted the potential for a Europe-wide regulation, prompted by critical evaluations from the European Central Bank (ECB) and the European Securities and Markets Authority (ESMA). These evaluations highlight the significant environmental risks posed by the energy-intensive processes involved in cryptocurrency mining, notably those utilizing the proof-of-work (PoW) model.
The news was broken by Daniel Batten on X.
🧵While we were sleeping, the European Commission (via ESMA & ECB) has been creating a report which they plan to label bitcoin— Daniel Batten (@DSBatten) January 31, 2024
-a threat to EU energy security
-a haven for financial criminals
Paving the way for 2025 de facto EU bans on BTC & BTC mining pic.twitter.com/Zj9er7E4V9
To mitigate these risks, there’s talk of the EU introducing a carbon tax specifically targeting crypto mining operations to discourage their energy consumption. This comes amid concerns over the energy usage of crypto mining activities surpassing that of several small countries, although efforts are being made within the industry to reduce this consumption. Moreover, the majority of crypto mining occurs outside the EU, in regions where electricity costs are lower, which adds another layer of complexity to the issue.
In light of these concerns, ESMA’s vice chair has advocated for a shift towards less energy-intensive mining methods, such as proof-of-stake (PoS), to alleviate the environmental impact. This stance is part of a broader EU initiative to curb energy use and promote sustainability within the burgeoning digital currency sector.
In the below X video Stephan Livera takes a deep dive into the defense of Bitcoin’s Proof of Work (PoW) in the EU, with Lyudmyla Kozlovska and Bota Jardemalie who advocate for Bitcoin and human rights from the OD Foundation. They discuss the potential impact of new EU regulations on Bitcoiners and miners, shining a light on EU bureaucracy, the ECB’s threat to Bitcoin, attacks on Bitcoin’s PoW, threats to self-custody and sovereignty, and the pivotal role of Bitcoin as a “bank of last resort”. Additionally, they share actionable ways for listeners to show their support through testimonials.
Defending Bitcoin PoW in the EU with @LyudaKozlovska and @jardemalie SLP542— Stephan Livera (@stephanlivera) January 17, 2024
We take a deep dive into the defense of Bitcoin's Proof of Work (PoW) in the EU, with Lyudmyla Kozlovska and Bota Jardemalie, advocates for Bitcoin and human rights from the @ODFoundation. We discuss the… pic.twitter.com/VGQ1SIWOE6