The EU could ban crypto mining in order to combat the energy crisis. As the area prepares for an unpredictable winter, the European Commission warned on Tuesday that members of the EU must be prepared to prohibit crypto mining. The European Commission serves as the organization’s executive arm charged with drafting new laws in the EU. This move comes in response to concerns about rising energy costs and shortages caused by the interruption of Russian gas. The EU is also creating an energy efficiency certificate for blockchains.
In a document published on the Commission’s website, the commission stated, “In the coming months and years, the Commission intends to take various steps to boost digital energy services while ensuring an energy-efficient ICT sector, including… an energy efficiency label for blockchains”. According to the commission, cryptocurrency now accounts for about 0.4% of the world’s electricity consumption. This figure has gone up 900% in just five years. The commission promised to release another report on the subject by 2025. This may contain additional recommendations for reducing cryptocurrency energy consumption.
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This new measure will also enable energy companies and government bodies to more easily identify crypto mining operations. As such, countries will be able to effectively enact load shearing policies should they see fit. “In case, there is a need for load shedding in the electricity systems, the [EU] Member States must also be ready to stop crypto-assets mining”. This would mean cutting off power supply to mining operations should a crypto ban go into effect in the EU.
The energy use of proof-of-work technology has attracted the attention of officials for quite some time now. The labeling plan will also aim to encourage transitioning towards a proof-of-stake model. As reported by Bloomberg, a draft of the proposal states that it aims to “encourage more environmentally friendly crypto systems such as proof-of-stake”. As such, the bill would favor currencies such as Ethereum which employ this method. This new measure is sure to cause mixed feelings among crypto proponents as it will limit their freedom and anonymity.
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