Financial regulator Erik Thedéen has requested the banning of Bitcoin PoW mining once more. Studies have shown that gold production and the banking system consume more energy than that activity.
The European Union again discusses the ban on Bitcoin (BTC) mining if it uses the proof-of-work (PoW) model.
Erik Thedéen, vice president of the European Securities and Markets Authority (ESMA), has again called for a ban on this practice. He argues that this will make it possible to comply with plans to reduce CO2 emissions, which harm the environment.
In November, Thedéen published that Bitcoin mining would go against the Paris Agreement. The objective of that international treaty is to propose the necessary policies to reduce climate change.
The European financial regulator states that Bitcoin PoW mining is inefficient, claiming it harms the environment. According to the Financial Times, he considers that proof of stake (PoS) consumes less energy, which would lead to banning only PoW mining.
That bill would not affect only Bitcoin mining but also Ethereum (ETH). The latter has not yet made the transition to version 2.0 with proof of stake. Therefore, it would stop its activities on the European continent with many other crypto assets.
Thedéen is also the CEO of the Swedish Financial Supervisory Authority (Finansinspektionen). That country has already passed a law that would reduce CO2 emissions to zero by 2045.
Bitcoin Mining Consumes Less Energy than Other Activities
Recent reports indicate that Bitcoin miners consumed more electricity than Norway, Chile, and Bolivia in May 2021. However, the energy consumption by the mining activity is less than 1% of the global total.
Some studies have pointed out that by 2030 Bitcoin mining will only use renewable energy, thus reducing the CO2 footprint.
Other analyses have revealed that gold production and the global banking system consume twice as much energy as Bitcoin mining. However, no one has proposed policies to ban such activities in Europe.
Europe Seems to Be Following the Example of China
The Chinese government officialized the ban on Bitcoin mining within the country in May 2021. They have recently declared it an obsolete activity, claiming an energy crisis.
The recent movements of the Chinese State classify any transaction with Bitcoin in the territory as illegal. That seems a way to pave the way for the arrival of the digital yuan (e-CNY) without leaving any competitor.
Europe has also started its pilot tests for its CBDC, the digital euro, which would give way to a new currency in Europe. That leads pro-environment arguments to support economic-protection measures against Bitcoin.
Instead of an environmental ministry or organization, an entity regulating assets and stock exchanges proposes the prohibition.
The role of cryptocurrencies in the economy is becoming increasingly evident, which regulators in many countries have not overlooked. For that reason, they seek ways to regulate and even ban their use, as in the case of China. Although they allege environmental harm and high energy consumption, most want to control how citizens use their money.
By Alexander Salazar
