EU is Moving to Regulating Energy Consumption of Crypto
On October 18th, the EU issued a set of papers about an action plan for executing the European Green Deal and the REPowerEU Plan. These are two plans that seek to reduce energy consumption via the use of digital technology. The European Union’s energy planners are keeping a close eye on crypto mining operations, among other energy consumers.
The Russian war had a considerable effect on the European energy supply, prompting the May announcement of the REPowerEU Plan. The European Commission said that the crisis in Russia presented a chance to quickly speed up the clean transition. The plan’s focus covers blockchains and other distributed ledger technologies as a subset of data centers.
Germany and Ireland dominate European crypto mining, but Sweden has seen a significant increase in activity since China’s ban on crypto mining. The European Securities and Markets Authority is envisioned to provide technical guidelines for crypto mining in this paper.
According to the authors, there are possible policy solutions that may be considered to reduce undesirable repercussions on the climate of technology employed in the crypto-asset market in an undated paper prepared by the EUBOF. In 2025, a study will be released on the effects of crypto assets on the environment, and this file will be essential to that analysis. If the EUBOF’s suggestions are implemented, they said that to lower demand for bitcoin and hence its value, this would be the first effort anywhere in the world.
The study also echoed the EUBOF document in saying that the EU should lead the way in developing international blockchain label standards and that investors need more information regarding the energy usage of cryptocurrencies. There is talk in Norway about reducing tax advantages for cryptocurrency miners.
Mairead McGuinness, the European Union’s commissioner for financial stability, financial services, and the Capital Markets Union, recently made an appearance in Washington, DC, where she emphasized the significance Europe places on the energy and environmental concerns related to cryptocurrency.
The Joe Biden administration of the US has also investigated the ecological effects of cryptocurrency.