Climate change to force Bitcoin bans and carbon taxes on cryptocurrencies, says ECB official
A new report from the European Central Bank (ECB) finds that climate change could force carbon taxes on cryptocurrencies, as well as a ban on extracting proof-of-work assets such as Bitcoin (BTC).
The report finds that since the EU authorities decided to strictly regulate petrol cars as a means of reducing greenhouse gas emissions, it would also make sense for them to go for proof-of-work blockchains for the same reason.
“It is difficult to see how the authorities can choose to ban petrol cars over a transitional period, but close their eyes to Bitcoin – type assets built on proof-of-work technology, with nationwide energy consumption footprints and annual carbon emissions that today negate most eurozone countries’ former and target greenhouse gas savings (GHG).
To continue with the car analogy, public authorities have the choice between stimulating the crypto version of the electric vehicle (proof-of-stake and its various blockchain consensus mechanisms) or restricting or banning the crypto version of the fossil car (proof-of-stake) blockchain consensus mechanisms at work ). ยป
The statement said that while it is possible for the authorities to do nothing, the most likely outcome is a direct ban on extracting Bitcoin and other proof-of-work cryptocurrencies and the introduction of a carbon tax on transactions involving digital assets.
“So while a hands-off approach from public authorities is possible, it is highly unlikely, and political actions by the authorities (eg disclosure requirements, carbon tax on cryptocurrencies or holdings, or a direct ban on mining are likely.”
The report also states that the prices of virtual assets may be affected by such guidelines.
“The price impact on cryptocurrencies targeted by policy actions is likely to be commensurate with the severity of the policy action and whether it is a global or regional measure.”
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Featured image: Shutterstock / Liu zishan
