The European Commission is taking huge steps to address the environmental impact of cryptocurrencies. In response to growing concerns about the energy consumption and carbon footprint of crypto-assets, the EU’s executive arm has allocated €800,000 ($842,000) for a comprehensive study aimed at understanding and mitigating the environmental harm caused by cryptocurrencies.
The study, which will run for a year, aims to create a methodology for measuring the climate and environmental impact of different consensus mechanisms utilized by cryptocurrencies.
This initiative aligns with the European Union’s commitment to achieving climate and sustainability goals in line with the Paris Agreement.
The European Commission stated, “There is evidence that crypto-assets can cause significant harm to the climate and environment.” It also emphasized that the ‘”growing demand for crypto-assets and the expansion of crypto-mining, including within the EU, could potentially hinder the EU’s efforts to align with its climate and sustainability objectives, as outlined in the Paris Agreement.”
The EU’s move mirrors global concerns about the carbon footprint of cryptocurrencies. The study comes at a crucial time when the crypto industry is facing increased scrutiny regarding its environmental impact.