EU invests €800,000 to assess Crypto damage

The European Union (EU) has taken the initiative to assess the environmental impact attributed to crypto. Amount of the operation: $842,000.

Crypto at the heart of the European Commission’s concerns

In a time when global focus is on environmental sustainability, all projects—including those in the crypto sector, which often operates outside governmental oversight—are rigorously evaluated for their environmental impact.

Numerous studies have been conducted to assess the environmental footprint of cryptocurrency. Recently, research from the University of Cambridge dispelled some concerns by demonstrating that cryptocurrencies don’t have the negative environmental impact many feared.

Even with these comforting findings, European authorities continue to worry about the proof-of-work consensus mechanism central to Bitcoin mining. Yet, Cambridge University’s research shows that Bitcoin’s energy use accounts for a mere 0.38% of global energy consumption.

But that’s enough for the European Commission, which initiated an €800,000 tender for a study that aims to tackle the climate effects of cryptocurrency usage.

EU, €800,000 for standards or for freedom-destroying measures?

The European Commission’s study, for which the bidding closes on November 10, has a singular goal: to establish the standards that will inform upcoming EU policies designed to mitigate the environmental footprint of cryptocurrencies. Additionally, this study could set the stage for new energy efficiency guidelines tailored to blockchain technology.

There is evidence that crypto-assets can cause significant damage to the climate and environment.

European Commission

Back in March 2022, an amendment to the MiCA regulation aiming to ban Proof of Work (PoW) was rejected. If it had passed, Bitcoin could have been officially banned in the EU.