Norway plans to temporarily ban cryptocurrency mining activities that use high energy-consuming technology
On Friday, the Norwegian government announced plans to temporarily prevent the establishment of cryptocurrency mining data centers that use energy-intensive techniques. The goal is to conserve electricity for other industries. This plan is expected to help mitigate the negative impact of mining activities on the environment and the energy ecosystem.
With this decision, Norway demonstrates its determination to control the promising yet controversial industry regarding environmental impact. The government emphasizes its intention to regulate the cryptocurrency mining industry through stricter regulations, aiming to limit high energy-consuming activities.
Norway's policy to restrict cryptocurrency mining
In April 2024, Norway began developing regulations to manage cryptocurrency mining activities. Operators must register with local authorities and disclose the services they provide. These regulations aim to control mining activities, especially high electricity-consuming operations like cryptocurrency mining.
Evidence for this policy is that data center management is required to register and clearly disclose the services they provide. The key for the government to be able to shut down or approve projects is based on their social and environmental impacts.
According to the government, the regulation helps improve management efficiency and mitigate negative impacts on biodiversity. Norway also emphasizes the desire to promote data centers with social benefits and environmental friendliness.
Cryptocurrency mining and sustainable development goals
Cryptocurrency mining is considered incompatible with Norway's environmental goals. The government is particularly concerned about the greenhouse gas emissions arising from this activity. The restrictive policy is part of efforts to balance industrial development and environmental protection.
Policymakers are also aware that the mining industry can disrupt the national electricity supply. A temporary ban on mining center activities is expected in the fall of 2025 to better control energy consumption.
"The government of the Labour Party clearly wants to limit cryptocurrency mining activities in Norway. This market consumes a large amount of electricity but provides little employment and income for the local community."
-Karianne Tung, Minister of Digitalization and Public Administration of Norway.
Tax policy and the impact of cryptocurrency mining
Additionally, in October 2022, the government proposed abolishing the preferential electricity tax rate for data centers, forcing mining activities to adhere to standard electricity prices. This policy helps ensure energy resources serve social goals and limit large-scale mining.
Deputy Finance Minister Trygve Slagsvold Vedum emphasized the importance of prioritizing electricity for social goals in the context of the booming cryptocurrency mining industry. The expected changes will generate an additional revenue of 150 million NOK, about 13.61 million USD, in 2023.
According to data from the Cambridge Bitcoin Mining Database, operators in Norway contribute approximately 0.74% of Bitcoin's total Hashrate, indicating a significant influence in the global cryptocurrency ecosystem.
The impact of the mining ban on electricity prices and local communities
In October last year, residents in Hasdel, Norway, witnessed a significant increase in electricity bills after a Bitcoin mining center was shut down. This is a clear example of the negative impact of cutting back mining activities on consumers.
Chairman of Noranett, Robin Jakobsen, stated that the closure of the mining center caused electricity prices to rise, predicting an average increase of 235 to 280 USD per year for households in the area.
Meanwhile, analysts like Daniel Batten emphasize the benefits of Bitcoin mining in cooling electricity prices, aligning with community interests and reducing costs for residents.
Source: https://tintucbitcoin.com/na-uy-chuan-bi-han-che-khai-thac-tien-dien-tu/
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