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

Mining farms have closed, abandoning Kazakhstan, Iran, and other Asian countries. Paraguayan miners firmly believe that the industry will take a big boost when the regulation is approved.

Bitcoin mining, which, in the middle of last year, generated more than 50% of its computing power (or hash rate) in China, begins to move away from the traumatic circumstances that take effect in Asia and now are heading toward a new direction.

The industry seems to have a promising future in Latin America, where the network is getting mined with geothermal energy from the volcanoes of El Salvador, and there is potential to get exploited in other countries such as Paraguay, Argentina, or Costa Rica.

Circumstances are forcing Bitcoin miners who have remained on the Asian continent to pursue new lands. After China started to combat digital mining and punish all activities related to cryptocurrencies, the mining centers got forced to close and leave the territory.

Many centers took refuge in Kazakhstan due to its proximity to China. The difficulties have also been concentrated in this country, affecting the production of such miners. In less than a year, they have had to face power and Internet outages, as well as riots and Russian troops roaming the entire region.

Asia is a territory that becomes hostile to Bitcoin miners, also taking into account that Iran recently decided to ban Bitcoin mining because, according to the authorities, mining activity has caused power outages.

Such movements might get repeated in almost all the Asian regions, which is gradually becoming an unfriendly continent with cryptocurrencies. The State Bank of Pakistan, for example, has submitted a document to the High Court calling Bitcoin and other cryptocurrencies “illegal” and useless for commercial purposes, local media have reported.

The truth is that as the restriction against cryptocurrencies and Bitcoin mining grows, more and more miners are now seeking greater geopolitical, economic, and energy stability for large-scale mining farms.

Paraguay and the World map of Bitcoin Mining

This year the bill that the legislators of the Guarani nation would be discussing will be approved, and it will get presented to the Chamber of Deputies in April. The regulations seek to establish a clear framework for Bitcoin and other cryptocurrencies.

Ribeiro adds that digital mining in the country has several barriers that might limit its growth and expansion. One of these barriers is that there is no capacity to feed large mining farms.

Ribeiro said it is one thing to have a large electrical capacity and quite another thing being able to use it, detailing that Paraguay’s electricity consumption law establishes a maximum of 6 MW for any industrial activity. It is one of the main reasons why, until now, there are no large farms in the country but small-scale miners.

Experts in Bitcoin mining in Paraguay such as Fernando Arriola and Juanjo Benitez Rickmann agreed that the digital mining sector would boost when the bill is approved, which they hope will happen this year.

By: Jenson Nuñez