Cryptocurrency News

Sweden’s Energy Minister Not In Favor Of Bitcoin Mining

The energy minister of Sweden has indicated that the government may decide to turn its back on crypto mining because of the projected rise in the demand for electricity. According to a media report, the bitcoin mining industry in Sweden, which is leading Europe, could potentially lose the preferential treatment it has been benefitting from.

A change in attitude

There is a possibility that the attitude of Sweden in regard to cryptocurrency mining might change because of forecasts predicting a rise in energy demand in various other sectors. Khashayar Farmanbar, the Minister of Energy, said that the country’s economy was no longer in a period of administration and was transitioning to an expansion.

Therefore, he said that their manufacturing industry would require a great deal of electricity. The official said that they needed energy for focusing on things that are significantly more important than bitcoin. Thanks to its wind parks and hydro reservoirs that provide low-cost and clean electricity, Sweden has become a hotspot for bitcoin mining. Its crypto mining industry has become one of the biggest ones in Europe.

But, the government in Stockholm has become concerned about the power consumption associated with crypto mining. Therefore, the Swedish Energy Agency has been told to assess the energy usage in crypto mining.

No hints of measures

However, it should be noted that Farmbar did not mention the measures that the Swedish government may use for restricting crypto mining activities, but they have discussed two options. The first is to make changes to the order used for connecting power users to the network grid.

This would mean giving priority to those that offer greater benefits to the Swedish society, like help in creating more jobs. The second option is to pull back on the preferential tax treatment given to data centers. According to an energy expert, the purpose of offering this tax incentive was not to attract crypto businesses but to draw in multinational corporations like Facebook and Microsoft.

More awareness needed

The Swedish Blockchain Association’s head, Sukesh Kumar Tedla, said that further awareness and education about crypto and blockchain is a must for officials like the energy minister who have strong opinions about them.

He said that while crypto mining did consume a lot of energy, the same is applicable to a number of other innovative technologies. Last year, a number of environmental protection and financial services agencies called for a ban on proof-of-work (PoW) mining in the EU. This is because the power consumption of the sector had increased significantly.

This form of mining is regarded as a threat to climate protection goals and many other countries have backed Sweden’s call. This includes Norway, Spain, and Germany. However, the regulatory package called the Markets in Crypto Assets (MiCA) for cryptocurrencies dropped the requirement of imposing a ban on this form of mining.

There are industries in Sweden that would benefit from not providing energy to crypto mining, including the steel industry which wants to be able to create fossil-free steel.

Leave a Reply

Your email address will not be published.