European Commission has admitted that it pays attention to the fearing of the European Union on the increasing consumption of electricity for cryptocurrency mining. This has been reported by the Commissioner of the European Union Mariya Gabriel who is responsible for digital economics and society.
According to the announcement on the European Parliament website, Gabriel has considered the problem, answering the question that was asked earlier in the parliament.
The commission, stated Gabriel, understands the concern about the growth of electricity consumption for cryptocurrencies and blockchain technologies in general.
The problem is especially topical for Bitcoin, mining of which is mostly concentrated in China. Although according to some calculations, two-thirds of mining capacities of Bitcoin are in China, a significant part is still located in other places. One should mention that Chinese Bitcoin miners are slowly moving their capacities abroad, particularly in Europe. As a result, Iceland plans to introduce an additional tax on Bitcoin mining.
The message of Europarliament says that there are no legal grounds for preventing or limiting the consumption of electricity in the European Union. Although, the use of electricity is economic activity, so it falls under the rules of EU about energy efficiency, energy sector, and issues of greenhouse gas emissions.
The latter – gas emissions in the energy sector – are controlled by the European scheme of emissions trading.
Mining business model is based on the providing the high price on cryptocurrencies, says the announcement. The growth of electricity consumption and its price is likely to influence the price and demand on cryptocurrencies.
Commission hasn’t used any tracking methods for cryptocurrency mining since it is not illegal. However, Commission will consider this activity since it influences the demand for electricity.
In her announcement, Gabriel also mentions that one should remember that many promising apps on blockchain do not require extensive calculating capabilities.
In January, the director of International Monetary Fund Christine Lagarde said during the Global Economic Forum in France that Bitcoin mining was too energy-intensive. Many analysts and ecologists had expressed their concerns about the use of electricity in this industry, and Lagarde stated that it turned out to become “a great problem,” given that the world was already fighting climate changes.
Last year, European Commission announced the plans to create the European Union Blockchain Observatory, answering the corresponding instruction from the Europarliament on improving the technical knowledge and ways of regulating blockchain. This project will include observatory and forum for gathering data about distributed ledger and blockchain technologies. The aim is to create the resource of expert knowledge for the promising topics concerning blockchain and its use by the EU.
The second goal is to help the European Union define the role of the state bodies in stimulating such technologies and developing political recommendations.