China is no longer alone that cryptocurrency mining should be banned: The Financial Conduct Authority and the Swedish Environmental Protection Agency recently called for a ban on mining due to its environmental impact.
Regulators were generous in a statement released November 5 titled “Crypto assets pose a threat to the transition to climate – energy intensive mining should be banned.” In it, the Financial Conduct Authority and the Environmental Protection Agency criticized the plans of miners to use renewable energy sources:
The most common method of producing cryptoassets requires huge amounts of electricity and generates large CO2 emissions. Crypto asset makers are looking to use more renewable energy sources and are increasing their presence in the Scandinavian region. Sweden needs renewable energy sources targeted by crypto asset producers to change the climate of our core services, and increased use by miners threatens our ability to comply with the Paris Agreement. Therefore, energy-intensive mining of cryptoassets should be prohibited.
This puts cryptocurrency mining farms in a situation “damn you if you do, damn you if you don’t.” The continued use of non-renewable energy sources for mining will draw more attention to the impact of cryptocurrencies on the environment; the transition to renewable energy sources means that other processes will not be able to switch themselves.
Sweden’s argument echoes that of the Chinese government when it banned cryptocurrency mining earlier this year. While it is easy to question the legitimacy of China’s claims, especially given that it has continued to work on its own digital currency, the announcement shows that at least some Western regulators have similar concerns.