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- The financial supervisory authority in Sweden has requested the EU to put a ban on cryptocurrency mining which uses energy-intensive proof of work protocol to validate the tokens
- The FSA also states that both BTC & ETH together have used twice of Sweden’s total electricity for the year.
- The FSA also alleges that cryptocurrencies are mainly used for money laundering and funding of terrorist activities.
As the wine old concerns around environmental implications of cryptocurrencies surround the community across the world, from stringent regulations & tax laws to major corporates renouncing as a means of payment, the world of cryptocurrency faces yet another pushback, this time from Sweden’s FSA.
Sweden’s financial supervisory authority (FSA) has submitted a report to the European Union to ban the mining of cryptocurrencies citing the energy-intensive mechanism, like the proof of work system to validate & authenticate its tokens.
A statement was released by the FSA which stated that crypto assets were a threat to the climate transition to the country and all energy intensive mining should be stopped. The report also further mentioned that asset producers in the crypto world were keener to use renewable energy to mine tokens as they moved to the Nordic region.
The authority body was further found stating that the country needed their renewable energy which was being targeted by miners to transition its essential services & also pointed out that increased use by miners further threatened their ability to meet the Paris agreement & hence mining should be prohibited.
It also questioned the social benefits of cryptocurrencies as it believes that most crypto assets were used for money laundering purposes, terrorist financing & ransomware payments and added that the scenario was alarming therefore cryptocurrencies needed to be regulated.
The FSA later cited a report by Digicononomist which mentioned that mining operations related to Bitcoin (BTC) & Ethereum (ETH) together consumed twice the electricity in a year than the whole country. It concluded by reasserting, all mining of cryptocurrencies that used proof of work method should include an EU leveled ban.
It was also proposed that all companies that trade with or invest in proof of work methods should be prohibited from declaring themselves as sustainable businesses.
Earlier in the year, after China’s ban on mining cryptocurrencies, miners have reportedly fled their operations to other countries like the US which came to the immediate rescue. However environmental-conscious countries like Sweden seem to be playing against it & have raised concerns for the same.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
