TThe White House says the environmental impact of the production of cryptocurrencies like bitcoin could hinder US efforts to fight climate change.
The ruling puts the Biden administration at the center of an already raging debate over the carbon footprint of digital assets. Critics have been sounding the alarm for months about the amount of electricity used in crypto mining operations.
While the White House Office of Science and Technology Policy stopped short of prescribing specific regulations, The report published on Thursday, said the U.S. should take action to mitigate pollution related to crypto production. The federal government should collect more data on energy use and work with states and the crypto industry to set standards, the office said.
“Depending on the energy intensity of the technology used, crypto-assets may impede broader efforts to achieve net zero carbon pollution consistent with US climate commitments and goals,” the White House office said. Crypto operations in the US now use about as much energy as home computers, according to the report.
President Joe Biden ordered the study in March as part of a sweeping executive order on cryptocurrencies. In the coming weeks, other federal agencies and offices are expected to release recommendations and reports on how the U.S. should handle the asset class.
The findings, released Thursday, coincide with the Biden administration’s focus on climate change mitigation. Since the beginning of 2021, US government agencies have launched a series of efforts related to global warming.
Creating new coins and validating transactions on the Bitcoin and Ethereum blockchains involves an energy-intensive process where multiple computers compete to solve complex mathematical puzzles, with the winner adding new verified transactions to the blockchain in exchange for token rewards.
The Ethereum network will undergo a major software upgrade this month known as Merge, which will shift the blockchain to a less energy-intensive approach. Bitcoin and Ether are the first and second largest tokens in the world respectively.
According to statistics cited Thursday by the White House, the U.S. now does 38 percent of global bitcoin mining, up from 3.5 percent in 2020. Meanwhile, the blockchains that support crypto assets now use more power than many countries, including Argentina and Australia, according to the report.
Air, noise and water pollution from crypto mining operations can harm the environment and “exacerbate environmental justice issues for underserved communities,” the document said. At the same time, the increased demand for electricity from these operations can put additional strain on already strained power grids.
Development of standards
The White House said new standards developed by federal agencies working with states and the crypto industry could reduce the impact. These may include measures to reduce noise generation and promote the use of clean energy.
Under Biden’s March executive order, government agencies and departments must submit a series of reports to the president this month. Thursday’s report was the first to be made public.
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