U.S. To Unveil Policy For Lowering Energy Use Of Crypto Mining

The Biden Administration is preparing a study on the energy consumption of crypto mining operations with the goal to issue policy recommendations on how miners could lower their energy use and carbon footprint, Bloomberg Law reported on Thursday.

The White House is drafting a study to assess the emissions and the strain on the power grid from crypto mining.

President Joe Biden issued an executive order in March 2022 to ensure “responsible development” of digital assets, including cryptocurrency mining. The executive order directed the Director of the Office of Science and Technology Policy to submit within 180 days a report to the President “on the connections between distributed ledger technology and short-, medium-, and long-term economic and energy transitions; the potential for these technologies to impede or advance efforts to tackle climate change at home and abroad; and the impacts these technologies have on the environment.”

The report is expected in August, according to Bloomberg Law.

“It’s important, if this is going to be part of our financial system in any meaningful way, that it’s developed responsibly and minimizes total emissions,” Costa Samaras, principal assistant director for energy for the White House Office of Science and Technology Policy, told Bloomberg Law.

As the energy crisis and the global push to greener energy sources advanced, regulators and lawmakers have turned their sights to cryptocurrency mining, a little regulated field that consumes a lot of energy.

Early this year, the vice-chair of the European Securities and Markets Authority (ESMA), Erik Thedéen, told the Financial Times that the European Union should consider banning the more energy-intensive method of cryptocurrency mining, as using a lot of energy undermines the bloc’s climate goals.

Crypto mining has become a lucrative business, but its mining method “proof of work” consumes a lot of energy, which ultimately has officials and analysts question the social benefit of cryptocurrencies.

In the U.S., a group of Democratic lawmakers, led by Senator Elizabeth Warren, demanded in January that six major cryptocurrency mining companies detail their high energy usage, the possible impact on the environment, and the role in driving up power bills for U.S. consumers. 

By Charles Kennedy for Oilprice.com

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