The report finds that since EU officials decided to heavily regulate gasoline vehicles to reduce greenhouse gas emissions, it would also make sense for them to go after proof-of-work blockchains for the same reason.
“It is difficult to see how authorities could opt to ban petrol cars over a transition period but turn a blind eye to Bitcoin-type assets built on proof-of-work technology, with country-sized energy consumption footprints and yearly carbon emissions that currently negate most Euro area countries’ past and target greenhouse gas (GHG) savings.
To continue with the car analogy, public authorities have the choice of incentivising the crypto version of the electric vehicle (proof-of-stake and its various blockchain consensus mechanisms) or either restricting or banning the crypto version of the fossil fuel car (proof-of-work blockchain consensus mechanisms).”
The statement says that while it’s possible for authorities to do nothing, the most likely outcome is an outright ban on mining Bitcoin and other proof-of-work crypto assets as well as the imposition of a carbon tax on digital asset transactions.
“So, while a hands-off approach by public authorities is possible, it is highly unlikely, and policy action by authorities (e.g. disclosure requirements, carbon tax on crypto transactions or holdings, or outright bans on mining is probable.”
The report also says that such policies may have an impact on the prices of virtual assets.
“The price impact on the crypto assets targeted by policy action is likely to be commensurate with the severity of the policy action and whether it is a global or regional measure.”
