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- An EU regulator has urged the union to ban proof-of-work Bitcoin mining saying it wastes renewable energy sources.
- An earlier statement by a Swedish investor firm reprimanded such moves, saying they were taking advantage of the industry’s defenselessness.
A European securities regulator has now joined the list that seeks to impose tight restrictions on the crypto proof-of-work (PoW) mining method. Unlike other critics, however, this regulator is focused on Bitcoin’s use of clean energy sources.
Erik Thedéen, the vice-chair of the European Securities and Markets Authority (ESMA), has raised concerns about the use of renewable energy for Bitcoin (BTC). In a recent interview with the FT, Thedéen said Bitcoin was becoming a “national issue” in Sweden since it risks climate change goals.
“Bitcoin is now a national issue for Sweden because of the amount of renewable energy devoted to mining,” Thedéen told the FT.
EU Regulator Wants Ban on Bitcoin Mining
Additionally, he urged European regulators to take stricter measures against PoW mining, not only for Bitcoin but all other cryptocurrencies using it. Instead, he advocated for the energy-efficient proof-of-stake (PoS) as a better alternative, saying:
“We need to discuss shifting the industry to a more efficient technology.”
“It would be an irony if the wind power generated on Sweden’s long coastline would be devoted to Bitcoin mining,” he added.
About two months ago, Swedish authorities called for a European Union-wide ban on PoW crypto mining, citing environmental and energy expenditure concerns. However, Paris-based alternative investment firm Melanion Capital, which is famous for its Bitcoin ETF, threw out such claims calling them “completely misinformed.” In defense of the industry, Melanion noted that Bitcoin miners “capture wasted energy and provide a baseload for a volatile resource like wind and hydropower.”
Moreover, the firm reminded that the Bitcoin mining industry, due to its decentralized nature, lacks a lobby to defend its interests and negotiate with governments. This, however, “should not be taken as an opportunity to implement measures rendering illegal an industry for its lack of defensive powers.”
The Back and Forth on Bitcoin’s Energy Use
All through 2021, Bitcoin mining and its energy use was a controversial topic in the industry. Billionaires and crypto influencers Elon Musk, Jack Dorsey, and Michael Saylor largely engaged in debates over the same. Elon Musk-led Tesla, for instance, discontinued its Bitcoin payment option, citing overwhelming mining power consumption. Musk later said the company would reconsider the decision if 50 percent of Bitcoin mining came from renewable energy sources.
Earlier this month, the Kosovo state of Southeast Europe banned crypto mining to tackle its worst energy shortage in a decade. Norwegian authorities are considering following this route.
China did away with all kinds of mining in May last year – something that turned out to be a blessing in disguise for the industry. The move decentralized Bitcoin mining further, in addition to propagating the use of renewable energy sources. According to the Bitcoin Mining Council, the cryptocurrency was using 58 percent renewable energy by Q3, 2021. Bitcoin now makes up 0.6 percent of the world’s energy production, according to figures from the Cambridge Bitcoin Electricity Consumption Index.