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Sweden’s financial supervisory authority, Finansinspektionen, has called for a ban on crypto mining, calling cryptocurrencies a threat to the climate.
Cryptocurrency mining requires immense amounts of electricity, and as a result, some crypto miners have pivoted to renewable energy sources amid growing criticism. Crucially, however, that poses an additional problem for Sweden.
“Sweden needs the renewable energy targeted by crypto assets by crypto asset producers for the climate transition of our essential services, and increased use by miners threatens our ability to meet the Paris Agreement,” the regulator said.
“Energy-intensive mining of crypto assets should therefore be prohibited,” the regulator added, citing that this view is also shared by the Swedish Environmental Protection Agency.
This announcement comes amid the COP26 conference, where the world’s environment activists and defenders pressured governments around the world to act quickly and with renewed urgency against climate change.
Sweden, mining and the climate
Sweden is home to abundant renewable energy sources, but there is only so much to go around, and Sweden’s regulator is in no hurry to prioritize cryptocurrencies over vital services.
The Swedish regulator clearly has a sharply negative view of crypto assets, but there is plenty of evidence—ranging from terrorist groups to money launderers in downtown Moscow—that suggests the dark side of crypto remains alive and well.
“I’ve been saying for a long time you cannot sustainably waste resources—using renewables for crypto mining is no solution,” Alex de Vries, founder of Digiconomist, told Decrypt.
Apart from other industries potentially losing out on renewable energy, there are other issues with crypto mining guzzling electricity—no matter how green its source. One of those issues is electricity waste, or e-waste.
According to research conducted by de Vries, Bitcoin mining produces the same level of e-waste each year as the Netherlands.
Sweden’s proposal
The regulator has made three concrete proposals in order to deal with the fallout of crypto asset mining.
The first is for the EU to consider an EU-wide ban on proof of work mining.
The second proposal is specific to Sweden, and is intended as a policy that can be adopted before the EU would ever potentially agree on and enforce such a ban. It involves the country introducing measures that halt the continued establishment of new mining sites.
Last but not least, the regulator suggests that companies that trade and invest in cryptocurrencies that were mined via the proof-of-work (PoW) method—like Bitcoin—should be prohibited from describing their activities as sustainable.