China is no longer alone in thinking cryptocurrency mining should be banned: Sweden’s Financial Supervisory Authority and Environmental Protection Agency recently called for mining to be banned due to its environmental impact.
The regulators didn’t mince words in a statement published on November 5 titled “Crypto-assets are a threat to the climate transition – energy-intensive mining should be banned.” (Hat-tip to Fortune.) In it, the Financial Supervisory Authority and Environmental Protection Agency criticized miners’ plans to use renewable energy:
The most common method for producing crypto-assets requires enormous amounts of electricity and generates large CO2 emissions. Crypto-asset producers are keen to use more renewable energy, and they are increasing their presence in the Nordic region. Sweden needs the renewable energy targeted by crypto-asset producers for the climate transition of our essential services, and increased use by miners threatens our ability to meet the Paris Agreement. Energy-intensive mining of crypto-assets should therefore be prohibited.
This puts mining operations in a “damned if you do, damned if you don’t” situation. Continuing to use non-renewable energy sources to mine will attract more concern about cryptocurrency’s effect on the environment; switching to renewable energy sources means that other processes won’t be able to make that switch themselves.
Sweden’s argument echoes that made by the Chinese government when it banned cryptocurrency mining earlier this year. Although it’s easy to question the legitimacy of China’s claims, especially since it has continued work on its own digital currency, this statement shows that at least some Western regulators have similar concerns.