EU to Ban Crypto over Proof-of-Work Crypto Mining

EU to Ban Crypto

February 24, 2022

Reading Time: 2 minutes

The Vice-Chair of the European Securities and Markets Authority (ESMA), Erik Thedéen, calls for the EU to issue a ban on proof-of-work crypto mining.

EU Regulators Should Push for Proof-of-Stake Mining: Erik Thedéen 

According to Thedéen, EU regulators should direct the crypto industry towards less energy-intensive proof-of-stake mining. According to him, proof-of-stake has a significantly lower energy profile.

In his proposition, VC Thedéen stated that Bitcoin mining had risen to a “national issue” for Sweden, his native country. He added that it would be ironic if the wind power generated on Sweden’s long coastline is used for Bitcoin mining.

According to a Cambridge Bitcoin Electricity Consumption Index report, proof-of-work crypto mining consumes 0.6 percent of the world’s total energy. If it is not addressed soon, cryptocurrencies could hinder achieving climate change goals in the Paris agreement.

The two leading cryptocurrencies by market capitalization, Bitcoin and Ethereum, are minted on a proof-of-work system. Critics say this method uses more computing power to validate the blockchain transactions, which trickles down to more electricity.

The crypto mining industry has spread rapidly across the globe. Thedéen noted that the financial industry and big organizations are now engaged in the cryptocurrency marketplace. Canada-based publicly-traded company Hut 8 is focusing on POW crypto mining. The ESMA VC argued that this organization is responsible for ensuring the practice is environmentally friendly.

Thedéen is not After a Blanket Ban on Cryptocurrency

Thedéen first called for a ban on energy-intensive crypto mining in November 2021. Then, he served as the director of the Swedish Financial Supervisory Authority.

Swedish officials have asked for a blanket ban on crypto, claiming the societal benefit of the digital tokens is doubtful. However, Thedéen has emphasized that he is not after a blanket ban. Instead, he is trying to spearhead a shift to proof-of-stake mining.

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