The European Union is preparing a bill that restricts cryptocurrency mining due to its high energy use. It is a matter of curiosity how the regulators will take care in this context.
EU to publish bill restricting high energy depleted cryptocurrencies
The market leader Bitcoin (BTC) has been associated with high energy usage over the years. It has come under fire several times before for its carbon footprint. That’s why regulators are enacting new laws that they hope will deter the use of Blockchains like Bitcoin. According to the Bloomberg news of the day, the European Union is preparing new rating standards aimed at promoting environmentally friendly cryptocurrencies using PoS protocols. Under the law, the EU is trying to develop an energy efficiency label for networks like Bitcoin as part of limiting energy consumption in the industry.
The law will apply to US members
According to the EU, the draft law will be developed through cross-border cooperation. However, it will force member states to prevail over the energy consumption of miners during the winter months. In particular, the EU is preparing for a winter season when it will not be able to supply gas from Russia.
Initial proposal to ban PoW
The European Union has previously proposed to ban PoS mining, even though it only has a 10% global share. Authorities have postponed the proposed ban to another date, after deciding that exchanges must report their energy use and environmental impact of the coins they choose to list. In parallel, the EU is preparing a report that aims to assess the climatic impact of cryptocurrencies by 2025.
On the other hand, the European Securities and Markets Authority (ESMA) has called on the EU to ban mining for Blockchains using PoW. The Commission said that tackling the repercussions of climate change will derail if something is not done immediately. In particular, the EU is joining other countries, including the US, in trying to reduce the amount of energy used in cryptocurrency mining. The White House claims that mining cryptos like Bitcoin could affect climate change mitigation efforts.
