Daniel Batten is ringing the alarm bells about the European Union's plan to label Bitcoin as environmentally harmful, which may lead to a ban on crypto mining. Batten, a ClimateTech investor, Bitcoin environmental impact analyst, and a managing partner at CH4 Capital, posted a snippet of a summary detailing guidelines for the European Commission's (EC) report on digital currencies' ESG ratings.
According to the document, the EC report will contain: "a particular focus on the environmental and climate-related impact of [crypto assets], as well as an assessment of policy options and, where necessary, any additional measures that might be warranted to mitigate the adverse impacts on the climate."
The suggested measures allegedly include:
- a carbon tax on mining, calculated based on the environmental impact of a given cryptocurrency,
- state-level authority to shut down mining operations for energy security reasons,
- the classification of Bitcoin mining as "harmful to the environment,"
- empowering the European Central Bank (ECB) to disincentivize crypto investments with relevant actions.
The document makes it clear that the European Commission considers Bitcoin mining "an environmentally harmful" waste of energy for powering an "obsolete consensus mechanism."
Batten's post sparked fierce reactions, most bashing EU policies, such as "The EU is trying to close the escape ramps to Bitcoin before fiat implodes." However, not everyone agrees with Batten's take on the subject.
Patrick Hansen, the director for EU strategy and policy at Circle, a USDC manager, questions Batten's sources and claims that the current EU's stance on crypto is an alternative that "prevented the outright ban of Bitcoin in early 2022 during MiCA negotiations."
Hansen points out that the European Securities and Markets Authority (ESMA) and the ECB, the actual institutions behind the discussed crypto regulations, only suggest methods to calculate and disclose cryptocurrency sustainability rather than propose an outright ban on mining.
Even though Hansen may have a point, Batten doesn't claim that any EU authority has already announced a plan to introduce a ban on Bitcoin mining. Instead, he suggests that the propositions on the table are likely to lead to some form of a crackdown on this activity and possibly harm the overall crypto market. He also remarks that the regulations, once accepted, may spill over outside the EU since ESMA has already signaled its intention to push the new law to become a global standard.
As regards the source of his information and – as the context suggests – the posted document, Batten cites the Open Dialogue Foundation, a non-governmental organization founded in 2009 in Poland and currently headquartered in Brussels. The foundation members have allegedly been diligent in analyzing the EU documents and advocating in favor of Bitcoin, which is potentially threatened by the European bureaucracy.
