No Legal Basis to Ban or Limit Bitcoin Mining: EU Official

No Legal Basis to Ban or Limit Bitcoin Mining: EU Official

The European Commission has confirmed that it is paying attention to concerns about rising electricity consumption for cryptocurrency mining in the European Union, according to European Commissioner Mariya Gabriel, who oversees digital economy and society.

According to a notice on the European Parliament website, Gabriel addressed the issue in response to a question posed to the parliament.

Power Consumption Accelerates

The Commission, Gabriel noted, is aware of the concerns on growing electricity consumption for cryptocurrencies and blockchain technology in general.

The issue is especially critical for bitcoin, for which mining is concentrated in China. While two-thirds of all mining takes place in China, according to some estimates, some amount of mining takes place in other places.

There is currently no legal basis to prevent or limit energy consumed within the EU, the statement noted. But given that electrical consumption is an economic activity, it is subject to EU rules that apply to energy efficiency, the power sector and greenhouse gas emissions. Greenhouse gas emissions in the power sector are covered by the EU emission trading system.

The cryptocurrency mining business model is based on delivering a high valuation of cryptocurrencies, the statement noted. The increasing electricity consumption and cost is likely to modify the value of and demand for cryptocurrencies.

Mining Is Legal

The Commission has not invoked any way to track cryptocurrency mining because it is not an illegal activity. However, the Commission will review the activity as it impacts the demand for energy.

It is important to keep in mind that many promising applications of blockchain technology do not have extensive need for processing power, Gabriels statement further noted.

In January, International Monetary Fund Managing Director Christine Lagarde told the World Economic Forum that bitcoin mining is too energy intensive. Many analysts and environmentalists have sounded the alarm on the industrys power usage, and Lagarde said that it has turned in to a big concern given that the world is already battle climate change.

Also read:IMFs Lagarde says that bitcoin mining consumes too much electricity

EU Explores Blockchain

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 capacity. The project will include an observatory and a forum to gather input on distributed ledger technology and blockchain technology. The goal is to establish an EU expertise resource for forward-looking blockchain topics and develop 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 technologies and to develop policy recommendations.

Featured image from Shutterstock.

12.03.2018 / 13:14 68
EU Can't Ban Bitcoin Mining Over Energy Concerns, Official Says EU Can't Ban Bitcoin Mining Over Energy
Cryptocurrency mining is perfectly legal in Europe and only subject to standard electricity rules, according to an EU commissioner. In a statement
Japanese Miners See Solar Energy as Only Way to Stay Profitable Japanese Miners See Solar Energy as
Kumamoto-Energy, a local power producer in Japan, has announced that they will use solar energy for mining cryptocurrencies. Japan Looks to Greener
EU Unveils Enabling Framework For Blockchain And Fintech, Wants To Be Global Hub EU Unveils Enabling Framework For
The EUs executive arm has published a Blockchain and fintech “Action Plan” to further innovate in the bloc. The European Commission released its
Europes Clocks Are Running Slow and Crypto Mining Is Being Blamed Europes Clocks Are Running Slow and
From wrecking the environment to making it harder to search for alien life, cryptocurrency mining has been blamed for a multitude of sins. But to
Plattsburgh Officials Want Bitcoin Miners to Vacate the Small Town Plattsburgh Officials Want Bitcoin
Last week officials from the small town of Plattsburgh New York filed a moratorium request against bitcoin mining operations that currently reside in
EU Eyes Blockchain Push With New FinTech Action Plan EU Eyes Blockchain Push With New
The European Union is beefing up its efforts to foster work around new technologies like blockchain. According to a 2018 Fintech Action Plan released
Comments (0)
Add a comment
Comment on