News

EU to investigate environmental impact of crypto-assets

Eu, cryptocurrencyThe European Commission (EC) is set to undergo a year-long study into the sustainability of crypto assets.

The EC’s financial services directorate has issued a tender for the project, which aims to develop a methodology and sustainability standards for mitigating the environmental impact of crypto-assets.

According to the EC’s description of the project given in the tender document, the increasing demand for crypto-assets could undermine the EU’s efforts to reach its various climate-related targets in line with the Paris Agreement.

“The preparatory action intends to develop a methodology to measure the climate and environmental impact of the consensus mechanisms used by crypto-assets and assess the feasibility of establishing environmental sustainability standards for crypto-assets with a view to the adoption of future legislative action in the area of crypto-asset financial regulation,” states the document.

The tender is valued at US$800,000, and the project is due to run for 13 months.

The high energy consumption of activities like cryptocurrency mining has been a cause of concern for some time. The study will also look at the crypto industry’s use of water, waste products and natural resources, according to the EU.

The EU has already passed the Markets in Crypto Assets regulation, which did not directly address sustainability issues after a proposal to limit the use of cryptocurrencies engaged in energy-intensive proof-of-work processes was voted down by six member states.

© 2023 fundsTech