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With far-right support, conservatives block progressives’ push to cut colossal carbon footprint of crypto-currencies

Date

14 Mar 2022

Sections

Euro & Finance

Today, the economic and monetary affairs committee of the European Parliament voted on new rules for regulating crypto-assets (MiCA - markets in crypto-assets). The Socialists and Democrats have been pushing for a regulatory response that protects consumers and combats money laundering, but also ensures crypto-assets are put on a more sustainable path. Bitcoin mining alone uses up more energy than countries the size of Austria or Portugal. The S&D and Green proposal to give the Commission the mandate to adopt a delegated act defining minimum environmental sustainability standards for the consensus mechanisms used for validating crypto-asset transactions was voted down by the conservatives and liberals with the support of the far-right ID group. The Socialists and Democrats abstained in the final vote.

Eero Heinäluoma, MEP and S&D negotiator for the report, said:

“The Socialists and Democrats abstained on the Berger report on regulating crypto-assets. These new rules will set the framework for digital finance for many years to come. Our group fully supports digital innovation in the financial sector and we welcome the progress made on key points during the negotiations. Indeed, we believe it’s important that a regulatory framework protects ordinary citizens, that it sets strict rules to prevent money laundering and that it gives a veto power to the ECB to block authorisations if financial stability is at risk.  

“At the same time, our group is really disappointed about the lack of any ambition in the field of sustainability. The principles set in this respect by the report are very weak and completely negate the reality. Indeed, crypto-currencies consume as much energy as all electric cars on our earth combined. The carbon footprint of a single bitcoin transaction equals a transatlantic return flight London to New York. This is 1.5 million times the energy used up by a VISA transaction. If we don’t curtail this massive carbon footprint by putting crypto-currencies on a more sustainable path, our efforts to combat the climate crisis and boost our energy independence risk being in vain.

“I regret that the Commission did not address this massive carbon footprint in its original proposal. During the negotiations, we managed to convince the conservative rapporteur of the need for minimum environmental standards and he supported a broad and ambitious agreement in February. Unfortunately, the conservative rapporteur then seems to have caved in to pressure from lobbyists and industry, making a complete U-turn in 48 hours and throwing the deal in the bin, which he himself had agreed upon and had described as very good. The alternative text he pushed through today – with the support of the far right –  is complete window-dressing, leaving the catastrophic consequences of the growing energy appetite of this growing industry unanswered.

“Supporting this completely unsustainable model is really a bad political message from the conservatives in times when energy prices for ordinary citizens and businesses are going through the roof and when the EU is trying at the highest level to reduce our dependency on Russian gas in the coming months. Our group is convinced we must address the massive carbon footprint of this industry. This is not about outlawing a new technology, as some claim, it is about ensuring that this industry is future-proofed by setting out minimum sustainability standards. This is why the S&D Group abstained on the final text.”

Jonás Fernández, S&D spokesperson on economic and monetary affairs, said:

“We do need new rules for crypto-currencies to better protect consumers, set minimum environmental standards and stamp out money laundering. Today more than ever, Europe cannot afford to waste any unit of energy or help rich oligarchs hide their money. We were deeply disappointed by the conservatives’ failure to rise to the occasion and provide this industry with a future-proof framework.”  

Note to the editor:

The European Commission proposed MiCA in 2020 to introduce better consumer protection after Facebook announced plans to introduce its own virtual currency, called Diem.

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