Following China's footsteps, the European Union is mulling over a ban on crypto mining. Notably, the Swedish Financial Supervisory Authority (FSA) and Environmental Protection Agency (EPA) made the proposal to ban proof-of-work coin minting. The Swedish officials stress that mining is holding back the region from achieving climate neutrality stated in the Paris Agreement.
The directors general of Sweden’s Financial Supervisory Authority and Environmental Protection Agency, Erik Thedéen and Björn Risinger, have recently called on the EU to completely ban the mining of cryptocurrencies using the Proof-of-Work (PoW) algorithm. The mining harms the environment no less than the extraction of minerals, they stressed. "Our conclusion is that policy measures are required to address the harms caused by the proof-of-work mining method. It is important that both Sweden and the EU can use our renewable energy where it provides the greatest benefit for society as a whole." Proof-of-work is the blockchain-based algorithm that secures many cryptocurrencies by verifying the authenticity and transparency of crypto transactions. Yet, this technology requires extreme power consumption. For example, the daily mining of 900 bitcoins leads to the emission of up to 120 million tons of carbon dioxide into the atmosphere per year. Bitcoin and Ethereum mining takes about twice as much electricity per year as the supply of the whole of Sweden.
Thedéen and Risinger believe that it is crucial to prevent the development of new facilities that employ energy-intensive coin mining methods as well as the opening of new mining enterprises in Sweden. They also urged authorities to introduce a new restriction for companies that trade or invest in PoW-based cryptocurrency. Officials note that such firms should be prohibited from describing their activities as eco-friendly or sustainable. Currently, PoS is used for mining of the most popular cryptocurrencies - Bitcoin, Ethereum, Litecoin, Dogecoin, etc. Ethereum developers have already announced plans to switch from PoW to another mechanism - Proof-of-Stake, which does not require mining.
