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Less than two months after Tesla’s Elon Musk said the company will be accepting bitcoin as payment for EVs, the company’s CEO did a U-turn, tweeting that Tesla will no longer accept the cryptocurrency because of its carbon footprint.
In the tweet, Musk said the company was concerned about the amount of energy bitcoin mining used, citing “rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
That bitcoin mining and transactions are energy-intensive activities is no secret: a recent report in the New Scientist said that in China alone, bitcoin mining will require 297 terrawatt/hours of energy by 2024 and account for 5.4 percent of the country’s electricity-related emissions at some 130 million tons of carbon dioxide.
In his tweet, Musk noted that cryptocurrencies were a good idea “on many levels”, with a great future ahead, but made a note of saying that “this cannot come at great cost to the environment.”
Tesla, he said, will not be selling any bitcoin but will use the crypto for transactions when its mining became more environmentally friendly. In the meantime, Tesla will look into other cryptocurrencies that have lower carbon footprints, the tweet also said.
Tesla became a major swing factor for the price of bitcoin after buying $1.5 billion worth of the currency earlier this year as part of investment diversification plans.
“In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity. As part of the policy, we may invest a portion of such cash in certain specified alternative reserve assets,” the company said in a regulatory filing in February. In the same filing, Tesla mentioned for the first time the possibility that it would start accepting bitcoin as payment for its cars.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.