The European Commission has presented this Tuesday an action plan for the “digitisation of the energy system”, in which measures are foreseen to reduce consumption by the technological sector, without forgetting cryptocurrencies. The executive branch of the European Union (EU) even appeals to countries to be “prepared” to stop cryptocurrency mining if it is necessary to free up capacity in electrical systems.
In a document explaining the plan, the European Commission indicates that activities related to cryptocurrencies are responsible for about 0.4% of all energy consumed on the planet. Highlighting that, the energy consumption of cryptocurrencies has practically doubled in the last two years and has increased by 900% in the last five.
“Given the current energy crisis and the risks of the coming winter, the Commission urges Member States to implement targeted and ambitious measures to reduce the consumption of electricity by cryptocurrency agents”, notes the body led by Ursula Von der Leyen. “In case there is a need to reduce the load on electrical systems, Member States must be prepared to stop mining crypto assets”, concludes the same note.
By way of example, mining is the activity that allows the processing of transactions in some cryptocurrencies, of which bitcoin is the main example. The term refers to the millions of computers permanently connected, which make possible the operation of the decentralized network that is at the base of this crypto asset. In 2021, ECO reported that bitcoin, at that time, used 2.5 times more electricity than Portugal in a year.
The Commission goes further in the tighter control of mining. “In a long-term perspective, it is crucial to end the tax benefits for cryptocurrency miners that exist in some Member States”, concludes the entity.
To contribute to the management of the problem, the European Commission is committed to “develop a report by 2025 that includes a description of the environmental and climate impact of new technologies in the crypto-asset market, as well as potential policy options that help to mitigate adverse impacts in the climate of technologies used in the crypto market”.
Finally, for this area, Brussels proposes international cooperation for the development of “energy-efficient labels for blockchains”, the name given to the technology that enabled the emergence of decentralized cryptoassets.
EC targeting crypto to save energy
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