The executive said the pandemic brought urgency to innovations. Recent research rejects that Bitcoin mining may cause harm to the planet.
Christine Lagarde, the actual president of the European Central Bank (ECB), said today, March 25, that innovations in the world of finance are pretty necessary. However, in cryptocurrencies like bitcoin (BTC) and other technological advancements, advancements have a downside.
For Lagarde, cryptocurrency mining’s environmental footprint is not a very quiet side of the industry. During her participation in the virtual panel, “How can innovation support sustainable growth?” The Bank for International Settlements organized as part of the Innovation Summit.
At the beginning of her speech, the executive pointed out: “the environmental footprint of cryptocurrencies, very celebrated at the moment, is also something that appears to make life on the negative side of these innovations.
The president also mentioned advances such as solar panels or batteries for electric vehicles that, in her opinion, it is still unclear what to do with them after their useful life.
Digital Currencies and Distributed Ledger Technology (DLT) Could Improve the Payment System
Lagarde considered that digital currencies, smart contracts, and distributed ledger technology (DLT) could improve the current payment system. Something she shared with his fellow panelist, Mark Carney, the UN’s special envoy for climate action.
Both speakers agreed that Bitcoin technology is essential to achieve better mutualism between the international payment systems. In other words, executives see these advances as elements to improve the existing system, not to generate a disruptive one.
Lagarde admitted that central banks are often seen as very conservative, something he justified by saying that institutions must maintain stability. However, she made clear that technological advances are a very intimate feature of financial institutions.
The debate reached a climax when they got into climate change and the sense of urgency left by the COVID-19 pandemic on innovations in the international financial system. The intention is to meet the growing needs but at the same time ensure sustainable growth.
Bitcoin Mining appears to be Positive for the Environment
Unlike Lagarde’s point of view and widely held opinions about the environmental impact of Bitcoin mining, recent studies clarified that the activity contributes to reducing the carbon footprint. In February, an investigation from ARK Investment Management showed that mining bitcoins is not harmful to the Environment but the contrary.
“Bitcoin shows a lot more efficiency than traditional banking and gold mining on a global scale. Traditional banking consumes 2.34 billion gigajoules (GJ) per year and gold mining 500 million GJ. In contrast, Bitcoin consumes 184 million GJ, less than 10% and 40% of traditional banking and gold mining, respectively,” Highlighted the researcher.
Another fact that refutes Lagarde’s reflections appeared in September 2020. The oil multinational Equinor announced that it would eradicate an annual emission of 20,000 tons of Co2. The company said it would sell the gas as a by-product to generate power in Bitcoin mining.
By: Jenson Nuñez
