Sweden against Cryptocurrency

The Swedish central bank

Back in 2021, Sweden started opposing the Bitcoin mining in the EU. Regulators in Sweden believe that Proof-of-Work mining of Bitcoin and other cryptocurrencies will prevent the country and the European Union from complying with the Paris Agreement on climate change.

In a joint statement, the head of the Financial Supervisory Authority, Erik Tedeen, and the head of the Environmental Protection Agency, Bjorn Reisinger, called for a ban on mining digital assets in this “energy-intensive way.” Officials noted that at the current market value, cryptocurrencies lead to the emission of up to 120 million tons of CO2 per year into the atmosphere. This is equivalent to the carbon footprint of 100 million round trip flights between Sweden and Thailand.

According to them, the attention to the topic of mining sustainability has led to the fact that more miners are exploring the possibilities of using renewable energy sources. Due to the availability and low prices for it in Scandinavia, many of the industry participants are considering relocation to the region. Since April, electricity consumption for mining has increased by hundreds of percent in Sweden, and in August 2021 the figure reached 1 TWh, the heads of departments indicated. They believe that using renewable energy to mine cryptocurrencies is unwise.

June this year the Riksbank published a report “Cryptocurrencies and their impact on financial stability”, in which he shared the results of his own research on mining on the Proof-of-Work consensus algorithm.

The Swedish central bank has called for a ban on Bitcoin and other Proof-of-Work cryptocurrencies due to environmental impact. According to the document, the energy consumption of this mining method is equal to 200,000 households.

Back in November 2021 Thedeen and Reisinger referred to data from the University of Cambridge. According to them, the electricity used to mine one bitcoin is enough to drive 1.8 million kilometers in a medium-sized electric car. “There are other mining methods that can also be used for Bitcoin and Ethereum that are estimated to reduce energy consumption by 99.95% while maintaining functionality,” they stressed.

“The central bank has no right to tell people what to do with their electricity. If they really cared about the environment, they would close their operations tomorrow morning,” bitcoin maximalist Knut Svanholm told Cointelegraph. In response to the Riksbank tweet, he also posted a video about bitcoin mining, which claims that the energy used to mine the first cryptocurrency is “not wasted.”

In early June 2022, Ethereum founder Vitalik Buterin criticized New York State’s moratorium on carbon-based electricity mining. According to him, the authorities should not choose “which specific applications” can consume energy. “Ultimately I agree with this (that is, I oppose banning PoW). The government picking and choosing which specific applications are an okay use of electricity or not is a bad idea. Better to just implement carbon pricing, and use some of the revenues to compensate low-income users” he said.

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