According to the White House, US efforts to combat climate change may be hampered by the environmental impact of producing cryptocurrencies like Bitcoin.
The conclusion places the Biden administration at the center of a debate about the carbon footprint of digital assets that are already raging. Concerns regarding the amount of electricity used in cryptocurrency mining operations have been raised by critics for several months.
The US must take action to reduce pollution linked to the production of cryptocurrencies, according to a report released on Thursday by the White House Office of Science and Technology Policy, even though it refrained from prescribing specific regulations. The office recommended that the federal government gather more information on power consumption and collaborate with states and the crypto industry to establish standards.
“Depending on the energy intensity of the technology used, crypto assets could hinder broader efforts to achieve net-zero carbon pollution consistent with U.S. climate commitments and goals,” the White House official said. According to the report, crypto operations in the US now use about as much energy as home computers do.
The study was requested by President Joe Biden in March as part of a comprehensive executive order on cryptocurrencies. Other federal offices and agencies are anticipated to issue reports and recommendations in the coming weeks regarding how the US should handle the asset class.
The Thursday findings are in line with the Biden administration’s emphasis on reducing climate change. American government organizations have started several global warming-related initiatives since the beginning of 2021.
Multiple computers compete to solve challenging math problems to create new coins and validate transactions on the Bitcoin and Ethereum blockchains. The winner adds newly verified transactions to the blockchain in exchange for token rewards.
