Sweden needs power for more useful things than Bitcoin mining, says Minister of Energy – Mining Bitcoin News

The government in Sweden is concerned about the expected increase in demand for electricity and may turn its back on crypto mining, the country’s energy minister has indicated. The Swedish bitcoin extraction industry, a leader in Europe, will probably soon lose the preferential treatment it has used for a while, a media report revealed.

Crypto miners may find it more difficult to access Sweden’s cheap green energy

In the midst of forecasts for increasing energy needs in other sectors, Sweden may change its attitude towards cryptocurrency mining. In a recent interview, Energy Minister Khashayar Farmanbar said that the Swedish economy is moving “from an administration period to an extreme expansion where our entire manufacturing industry seeks to electrify”. Quoted by Bloomberg, the official stated:

We need energy for more useful things than bitcoin, to be honest.

With its hydro reservoirs and wind farms that provide clean and affordable electricity, Sweden has attracted many bitcoin miners and the coin minting industry has become one of, if not the largest in Europe. However, concerned about the increased power consumption, the government in Stockholm has given the Swedish energy authority the task of estimating energy consumption in the digital space, especially crypto mining.

The location of mining farms is largely determined by the availability of cheap electricity, while the profits of their operators largely depend on the prices of cryptocurrencies. The results of the commissioned review are likely to exacerbate the first of these conditions, and the downturn in the crypto market has already affected the second.

Farmanbar refrained from revealing what measures the government can impose to limit mining, but two alternatives have been discussed. One is to change the order in which electricity users are connected to the grid, and to prioritize those that probably provide greater benefits to society, such as creating a large number of jobs.

The second possible measure is to limit the scope of the tax preferential treatment that all data centers currently enjoy. The argument is that the purpose of this incentive was to attract multinational companies such as Microsoft and Facebook, not crypto mining companies, as noted by a senior adviser in the industry group Swedenergy, Erik Thornstrom, who elaborated:

I think the existing tax breaks should focus on the activities they were meant to attract in the first place. Recovery of cryptocurrencies is more questionable.

Officials advised to learn more about innovative technologies such as crypto mining

“I think many government officials, including the energy minister who has strong opinions on cryptocurrency and the blockchain in general, need further education and awareness,” commented Sukesh Kumar Tedla, head of the Swedish Blockchain Association. He admitted that crypto mining uses a lot of energy, but pointed out that so do many other innovative technologies as well.

The latest episode in the debate about the future of bitcoin mining in Sweden comes after the directors of Sweden’s financial services and environmental protection agencies last year proposed a ban on energy-intensive proof-of-work (PoW) mining in the EU, due to a serious increase in energy consumption in the sector.

Their call to eliminate the alleged threat to climate change targets has been supported by officials in other EU nations, including Germany, Spain and Norway. However, a proposal to ban PoW mining was dropped from the draft comprehensive regulatory package Markets in Crypto Assets (MiCA) agreed by the EU institutions. The controversial text constituted a Bitcoin ban, according to the continent’s crypto community.

Among those who hope to benefit from curbing crypto mining operations are, for example, companies from Sweden’s steel industry. For example, SSAB plans to organize a fossil-free production and insists that network operators should prioritize industrial projects as their own rather than connecting users on a first-come, first-served basis, which is what they are currently doing. “We can reduce Sweden’s carbon dioxide emissions by 10%,” insisted Tomas Hirsch, energy manager at SSAB.

“Is bitcoin mining what we should use electricity for, when we can, for example, use it to make fossil-free steel? It is not entirely trivial in a free market, “commented Minister Farmanbar, noting that in the face of expected bottlenecks, Sweden should look at whether they use their energy in the best possible way. His statement comes as politicians like him are under increasing pressure to fight global warming.

Do you think Sweden will impose restrictions on mining cryptocurrency? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a technology expert from Eastern Europe who likes Hitchens’ quote: “Being a writer is what I am, rather than what I do.” In addition to crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.