There’s been plenty of regulatory and government chatter on cryptos in recent months. Late last year, a Stablecoins Committee Hearing looked into stablecoins, with stablecoiners receiving some tough questions.
The Stablecoins Committee Hearing looked into the risks associated with the likes of USD Coin (USDC). We have yet to hear of any action plans from Congress in response to the hearing.
House Committee on Energy & Commerce
Today at 1030am, EST, the Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce will hold a hearing titled“Cleaning up Cryptocurrency: The Energy Impacts of Blockchains”.
Today’s hearing is scheduled to address issues relating to cryptos, the environment, and energy.
According to subcommittee chairman Pallone’s briefing memorandum, a number of key issues that will likely be discussed include:
- Proof-of-Work (PoW) crypto mining.
- Energy consumption.
- Carbon emissions.
- Cleaner alternatives.
When considering the stats that the briefing memorandum refers to, PoW protocol and Bitcoin (BTC) are in for a tough day ahead.
Other Considerations ahead of Today’s Hearing
Key PoW mining stats from the briefing memorandum include:
- The estimated annual energy usage of the Bitcoin network alone grew from 77.78 Terawatt-hours (TWh) on 2nd January 2021 to more than 198 TWh on 26th November 2021.
- Over the same period, the Ethereum (ETH) network’s annual energy usage grew from 14.81 TWh to more than 92 TWh.
- A single ETH transaction added more than 90 pounds of CO2 to the atmosphere, while a single BTC transaction added more than 1,000 pounds.
- The global 2021 CO2 emissions of ETH and BTC mining are equivalent to tailpipe emissions from more than 15.5m gasoline-powered cars on the road every year.
Other key stats that we have previously reported include:
- According to Columbia Climate School, Bitcoin (BTC) is thought to consume 707KwH per transaction. In addition, there are also mining computers that heat up and need cooling.
- The University of Cambridge estimated that Bitcoin (BTC) mining consumes 121.36 terawatt-hours (TWh) per year. Based on this estimate, if Bitcoin were a country, it would be a top 30 energy consumer.
- It is estimated that Bitcoin (BTC) mining yields 22m to 22.9m metric tons of CO2 emissions each year.
- In terms of global warming, Bitcoin (BTC) mining could push global warming above 2 degrees centigrade in less than 3-decades.
U.S – China Carbon Emission Goals
For the subcommittee, there are a number of reasons to make progress towards cleaner alternatives.
- China banned Bitcoin mining in June 2021 as part of its goal to be carbon neutral by 2060.
- Since China’s ban, the U.S has become the world’s largest Bitcoin mining nation, according to Cambridge Centre for Alternative Finance.
- President Joe Biden announced a new target for the U.S “to achieve a 50-52% reduction from 2005 levels in economy-wide net greenhouse gas pollution in 2030”. Upon taking office, President Biden rejoined the Paris Agreement, aiming to tackle the climate crisis both domestically and abroad. The U.S has a goal of reaching net-zero emissions by 2050.
The EU Calls for a Ban on PoW Mining
If China’s 2021 ban on Bitcoin mining is not enough of an incentive for U.S lawmakers, the EU has also begun to talk of the adverse impacts of PoW mining on the environment.
Overnight, news hit the wires of the vice-chair of the European Securities and Markets Authority (ESMA) calling for a ban on PoW mining. The comments follow India Prime Minister Modi’s calls for a unified approach on cryptos at this week’s DAVOS 2022.
With the SEC-Ripple’s Lab case ongoing, regulatory scrutiny is unlikely to abate any time soon.
Regulatory Scrutiny to Intensify
On Wednesday, news had hit the wires of SEC Chair Gary Gensler warning of a crackdown on digital assets this year. The SEC Chair talked of more direct regulation of crypto trading platforms in the coming months. He added that the additional scrutiny is crucial to give crypto investors the levels of protection seen across other assets.