Sweden Opposes Bitcoin Mining amid Rapid Growth in Energy Demand
Sweden is seeking to redirect the energy used by crypto miners to operations that will create more jobs in the country.
Europe's mining paradise Sweden hopes to redirect the power of bitcoin miners to job creation projects, as the demand for energy in the country is growing rapidly.
This was stated by Swedish Energy Minister Hashayar Farmanbar in an interview with Bloomberg News.
"To be honest, we need energy for more useful things than Bitcoin. We are moving from a period of administration to an extreme expansion, when our entire manufacturing industry is striving for electrification."
The demand for electricity in the country is growing due to the growth of cryptocurrency mining. Data centers in the district today use only a tiny percentage of Sweden's electricity, and the share of crypto mining is even smaller. However, the estimates of the district show that by 2040, the demand for electricity from mining can grow by 8 times.
Mining in the region
Sweden's wind and hydropower, affordable electricity and cold climate create ideal conditions for crypto miners. The district does not publicly disclose mining industry data. Therefore, it is difficult to estimate the size of mining. However, it is known that mining giants work in the country, including Canadian Hive Blockchain Technologies and Hong Kong Genesis Mining.
According to the Cambridge Bitcoin Electricity Consumption Index, Sweden accounts for 0.84% of the average monthly global hashrate based on data for January 2022. The country also ranks 27th among the countries with the highest annual electricity consumption for Bitcoin mining, with a total consumption of 124,609 terawatt hours.
A few weeks ago, the Swedish government asked the Swedish Energy Agency to disclose how much energy is used for digital infrastructure, especially with a request to pay special attention to cryptocurrency mining. As soon as the figures are received, Farmanbar said that the government will take some measures to stop cryptocurrency mining in the region in order to redirect electricity to industries that can bring tangible benefits to the country, for example, create more jobs.
Without mentioning any details about the measures the government is considering, Farmanbar hinted at a change in the country's current tax policy.
Currently, the same affordable tax rate is applied to all data centers in order to attract global giants such as Microsoft and Meta to the country. However, in combination with the climate and cheap electricity, the country attracted mining companies more than others.
Eric Thornstrom, Senior Advisor at Swedenenergy, commented on the possibility of an update to differentiate tax rates and said:
"I think that the existing tax benefits should be focused on the activities that they should have attracted in the first place. Cryptocurrency mining is more questionable."
In addition, Sweden also takes into account the impact of cryptocurrency mining on the environment when planning to stop mining. The country plans to invest the energy obtained from mining in environmentally friendly projects, such as the production of steel without fossil fuels. It is estimated that the government expects to reduce national carbon emissions by 10%.
Other countries with changing attitudes to mining
Kazakhstan, the third country with the highest level of mining, is also experiencing the same problem as Sweden. The energy crisis in Kazakhstan began in November 2021, and since then the country has been cutting off electricity from Bitcoin miners to save the rest of the country.
Until now, Kazakhstan has implied a significant increase in taxes and a bureaucratic burden for all cryptocurrency mining operations to hinder their work. Before the energy crisis broke out and the country took these measures, Kazakhstan was the second country with the highest cryptocurrency production.
On the other hand, Paraguay recently announced a new bill that will work in favor of crypto miners. The new bill of the Senate of Paraguay is currently awaiting the approval of the President. If it is passed, the district will offer miners excess energy at affordable prices and exempt them from value-added tax.
Author: Dan, analyst Сoin-signal.com Club Crypto News
https://coin-signal.com/cryptonews/sweden-opposes-bitcoin-mining-amid-rapid-growth-in-energy-demand/
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