Regulator: EU Should Ban Crypto Mining Method That Uses Large Amount of Energy

Erik Thedéen, vice chairman of the European Securities and Markets Authority (ESMA), said bitcoin mining has become a national issue for his native Sweden and warned that cryptocurrencies exacerbate climate change, according to the report.

The ESMA, an independent European Union Authority, is one of the three European Supervisory Authorities established within the European System of Financial Supervisors.

Thedéen said that European regulators should ban a mining method dubbed Proof of Work (PoW), the report stated. Instead, he argued that the sector should adopt a Proof of Stake (PoS) model that uses less energy.

Read more: What is Staking?

“We need to have a discussion about shifting the industry to a more efficient technology,” Thedéen told FT, adding that he opposes an outright ban on cryptocurrency. “The financial industry and a lot of large institutions are now active in cryptocurrency markets, and they have [environmental, social and governance (ESG)] responsibilities.”

This is not the first time Thedéen has called on the EU to forbid energy-intensive crypto mining. In November, Thedéen, who also serves as director general of the Financial Services Authority of Sweden, expressed concern that crypto mining will cause the country to be unable to meet climate obligations.

See more: Sweden Calls on Europe to Pull the Plug on Bitcoin Mining

Crypto mining in Sweden escalated between April and August of last year. The electricity used could run 200,000 regular households.

Thedéen’s comments follow China’s decision last year to shutter crypto mining operations.

Read more:  China Declares All Cryptocurrency, Related Transactions Illegal

China’s action has sent mining companies scrambling for other countries to undertake their operations.

See more: Crypto Mining Companies Search for New Work Locations After China Aims to Reduce Coal Power Usage