The European Union needs to ban proof-of-work based cryptocurrency mining due to its environmental impact, European Securities and Markets Authority (ESMA) vice-president Erik Thedéen has said in an interview with the Financial Times.
According to him, Bitcoin mining has become a "national problem" in Sweden. He has added cryptocurrencies jeopardize meeting the climate goals of the Paris Agreement. According to Thedéen, European regulators should think about banning mining using the proof-of-work mechanism and only allow cryptocurrencies that use proof-of-stake, as they require less energy:
"The solution is to ban proof-of-work. Proof-of-stake has a significantly lower energy profile. 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. They have responsibilities to the environment and to society."
The Swedish authorities have previously raised the issue of a mining ban, noting that cryptocurrencies increasingly use renewable energy, but "their social benefit questionable:"
"We call for the EU to consider an EU-level ban on the energy-intensive mining method proof of work."
Subscribe to our Telegram channel to stay up to date on the latest crypto and blockchain news.
If no action is taken by the authorities, significant amounts of renewable energy will go into Bitcoin mining, rather than transferring traditional industries from more harmful sources, according to Thedéen. He has added:
"It would be ironic if wind power generated on Sweden's long coastline could be used to mine Bitcoin."