Sweden’s Financial Supervisory Authority and Environmental Protection Agency call for more energy efficient approaches to crypto asset extraction.
In an opinion piece in the Swedish newspaper Dagens Nyheter, the directors general of the two organisations, Erik Thedéen from the FI and Björn Risinger from the EPA, argue that the growing interest in energy-intensive Bitcoin and Ethereum mining is threatening the country’s ability to achieve its Paris Agreement goals.
A ban is needed on the extraction of crypto assets that use a lot of energy, they say, proposing that the EU should investigate banning the energy-intensive method of extraction and that in the meantime Sweden should counteracts the broad establishment of crypto mining nationally.
The two directors-general state that estimates of the consumption of mining for Bitcoin and Ethereum are about double Sweden’s annual electricity consumption.
Moreover, with the push towards cryptomining with renewable energies, eyes are on the Nordic region, where prices are low, taxation is favourable and the availability of renewable energy is good.
Between April and August this year, electricity consumption for the extraction of Bitcoin in Sweden increased by several hundred percent and now amounts to 1TWh on an annual basis.
“This corresponds to the household electricity of 200,000 households. It is a development that we need to stop.
“If we were to allow large extraction of crypto assets in Sweden, we run the risk that our renewable energy will not be enough for the crucial climate changes that we need to make, like producing fossil-free steel, large-scale battery production and electrification of our transport sector.”
Thedéen and Risinger say their conclusion is that the method currently used to extract Bitcoin and Ethereum must be regulated, with one option being a climate tax on energy-efficient mining.
Both the EU and Sweden need to be clear that our renewable energy should be used where it is most beneficial to society as a whole, they say.
Were the EU to take such as step, it would not be the first to do so as China has already implemented a ban. However, it is likely to be hotly debated, with opposition emerging from the Swedish Bitcoin Association, while Mathias Sundin, President of the Future Foundation Warp Institute, has suggested it would be more effective to stop gold mining than cryptocurrencies.
“Cryptocurrencies change the world as much as the internet,” signals Totte Löfström, CEO of the Swedish cryptocurrency exchange Trijo.