No Legal Basis to Ban or Restrict Bitcoin Mining: EU Official
The European Commission has confirmed that it is paying attention to concerns about increasing electricity consumption for cryptocurrency mining in the European Union, based on European Commissioner Mariya Gabriel, who oversees the digital economy and society.
According to a notice on the European Parliament site, Gabriel addressed the issue in response to a question posed to the parliament.
Power Consumption Accelerates
The Commission, Gabriel noted, is mindful of the concerns on growing electricity consumption for cryptocurrencies and blockchain technology in general.
The issue is particularly critical for bitcoin, for which mining is concentrated in China. While two-thirds of mining occurs in China, according to some estimates, some amount of mining takes place in other places.
There is currently no legal basis to prevent or restrict energy the statement noted. But given that electric consumption is an economic activity, it is subject to EU rules that apply to energy efficiency, the power industry and greenhouse gas emissions. Greenhouse gas emissions from the energy sector are covered by the EU emission trading system.
The mining company model is based on delivering a high valuation of cryptocurrencies, the statement noted. The rising electricity consumption and cost will alter the value of and need for cryptocurrencies.
The Commission has not invoked any way to monitor cryptocurrency mining because it is not an illegal action. However, the action will be reviewed by the Commission as it impacts the demand for energy.
It's important to keep in mind that lots of promising applications of blockchain technology do not have extensive need for processing power, Gabriel's announcement further noted.
Many analysts and environmentalists have sounded the alarm on the industry's energy use, and Lagarde said it has turned in to a «big concern» since the world is already battle climate change.
The European Commission announced plans last year to establish an EU Blockchain Observatory in response to a European Parliament mandate to strengthen technical expertise and regulatory capability. The project includes an observatory and a forum to gather input distributed ledger engineering and blockchain technology. The purpose is to establish an EU experience resource for forward-looking blockchain themes and create EU use cases.
Another goal is to assist the EC in determining what role — if any — government authorities can play to encourage the creation of such technology and to develop policy recommendations.