EU Regulator Calls for Ban on Proof-of-Work Mining Used by Bitcoin, Ethereum

Erik Thedéen, vice chair of the European Securities and Markets Authority (ESMA), has called for a ban on proof-of-work crypto mining based on the industry’s high energy demands, per the Financial Times. 

Thedéen, who also serves as director general of Sweden’s financial services regulator Finansinspektionen, told the Financial Times that Bitcoin mining had become a “national” issue for the Nordic country. 

“The solution is to ban proof-of-work. Proof-of-stake has a significantly lower energy profile,” Thedéen said. 

However, Thedéen emphasized that he was not advocating for a general ban on the crypto industry. 

“We need to have a discussion about shifting the industry to a more efficient technology. The financial industry and a lot of large institutions are now active in cryptocurrency markets, and they have [environmental, social and governance] responsibilities.”

Sweden’s ongoing battle with crypto mining

Finansinspektionen already publicly called for a ban on energy-intensive crypto mining in November of last year—claiming that Sweden needed the renewable energy sources elsewhere. 

“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,” it added.

The regulator also said that the Swedish Environmental Protection Agency shared this view. 

The crypto mining industry has come under great scrutiny over the last year due to its immense energy demands. 

The upshot of this has been renewed calls for the mining industry to focus on using renewable energy, but as Sweden demonstrates, concerns remain. 

“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, previously told Decrypt.