Business

EU officials were considering a bitcoin trading ban to enforce the proposed mining ban

blank

European Union (EU) officials discussed the ban on bitcoin trading during a debate on a proposal to ban proof-of-work mining, according to documents obtained through a freedom of information request.

EU officials even went so far as to suggest that a total ban on Bitcoin (BTC) trading should be enforced in a bid to curb overall energy consumption, according to a report published by the German organization for digital culture Netzpolitik.

The most worrying comments from the crypto community perspective came from a document detailing the minutes of an EU meeting with Sweden’s financial regulator and an environmental protection agency, in which officials suggested regulators should pressure the Bitcoin community for a proof of Stake (PoS). Mechanism replacing the current energy-intensive Proof of Work (PoW) mechanism. An unidentified official at the discussion said:

“Ethereum started to move [to PoS] because of its community…if Ethereum is able to shift, we could ask BTC to do the same. We need to “protect” other crypto coins that are sustainable. We don’t see [the] need to “protect” the bitcoin community.

Another unnamed speaker suggested that the EU could reasonably ban trading crypto assets that use a PoW algorithm across the board.

The answer to that question has been redacted in the document to protect the “ongoing decision-making process,” but it draws attention to the fact that the EU is seriously considering such dramatic regulation.

Discussing the potential impact of an outright Bitcoin ban on investors and retailers, officials were largely unconcerned, claiming that all Bitcoin investors are fully aware of the downside risk.

“Participants in BTC are fully aware of the volatility of currency/investment risk. [We] do not need any additional protective measures.”

This report comes as Bitcoin’s energy use continues to draw attention from environmental organizations and regulators. According to the University of Cambridge’s Bitcoin Electricity Consumption Index, bitcoin mining currently consumes around 139 terawatt hours (TWh) of electricity annually. For comparison: According to Statista, the entire United Kingdom consumed only an estimated 265 TWh in 2021.

In late March, Ripple co-founder Chris Larsen teamed up with Greenpeace to pressure Bitcoin to switch its consensus mechanism to PoS, much like Ethereum intends to do later this year.

The EU’s Economic and Monetary Affairs Committee recently voted against legislation calling for a ban on proof-of-work mining. However, these documents offer a unique insight into the efforts some EU officials are willing to make to tackle mining-related energy use.

While it appears that PoS cryptocurrencies remain safe from sweeping regulatory action in the short term, bitcoin mining in the EU will continue to be a contentious issue.