EU securities regulator calls for proof-of-work crypto mining ban

Erik Thedéen, the vice-chair of the European Securities and Markets Authority has raised concerns over the growing use of renewable energy for Bitcoin mining.

In a recent interview with the Financial Times, Thedéen said that Bitcoin (BTC) mining has become a “national issue” and warned cryptocurrencies could pose a risk to climate change goals. 

He called upon European regulators to take special exception to proof-of-work mining which is primarily used by Bitcoin and a few other forked altcoins. He also advocated for proof-of-stake as a better, energy-efficient alternative:

“We need to have a discussion about shifting the industry to a more efficient technology.”

Melanion Capital, a Paris-based alternative investment firm, has addressed the growing call for a ban on PoW mining back in November 2021, called it “completely misinformed”

The investment firm said that due to the decentralized nature of Bitcoin, there is no lobby or group to defend its interests, which “should not be taken as an opportunity to implement measures rendering illegal an industry for its lack of defensive powers.”

Related: Swedish call to ban crypto mining ‘completely misinformed,’ says fund manager

The Bitcoin network’s energy usage was one of the most controversial topics in 2021 that saw the likes of Elon Musk, Jack Dorsey and Michael Saylor engage in several debates. Tesla even discontinued the Bitcoin payment option citing the Bitcoin network’s energy usage. However, unlike Thedéen, most of the critics until now had no issue with clean energy usage. Musk has claimed that if 50% of the Bitcoin network’s energy comes from renewable sources, Tesla would rethink adding a Bitcoin payment option.

China’s Bitcoin mining ban in May last year turned out to be a boon for the ecosystem, as it not only disintegrated the highly centralized Bitcoin mining industry, it also helped in moving towards renewable energy usage. According to the Q3 report from Bitcoin Mining Council, renewable energy usage by the Bitcoin network reached 58% by the third quarter of 2021.

Global Sustainable Energy Index Source: BMC Report