In the wake of Europe’s energy crisis, EU member states should prepare to stop mining crypto. Officially, the EU Commission unveils its proposal for grading crypto assets according to their environmental impact.
According to an action program on digitalizing the EU’s Energy System, the European Commission has announced that crypto mining must be stopped by member countries of the European Union.
The war in Ukraine is putting stress on Europe’s energy supply. The commission asks countries to reduce their electricity consumption for crypto miners. There are also the possibility of mining operations being stopped in areas where the electrical grids have to be loaded.
The longer-term goal of the commission is to encourage EU members not only to end current tax breaks but also to stop subsidizing proof-of-work miners.
The European Commission announced that it would introduce a rating system to rate cryptocurrencies based on their environmental impact within the European Union. Policy makers aim to achieve high-bar climate goals with the EU’s green deal. EU leaders cited The Merge Ethereum’s transition from proof-of-work to proof-of-stake as an example of the improvements it wants to see in the blockchain ecosystem’s energy consumption. According to the commission, it will work internationally with standardization bodies in order to create an energy-efficiency label.
The scheme will be implemented in 2025 if it is approved.
During March’s debate on the Markets in Crypto-Assets legislation, the rating system was created as a compromise for a proof-of-work consensus mechanism among policymakers.