Skip to main content

Ban or regulate: The world searches for a way to deal with cryptocurrencies

 China bans cryptocurrencies. The Central African Republic is making Bitcoins a legal tender. Meanwhile, the EU failed to require the crypto industry to be more sustainable: Conservatives and the Right prevent the paragraph demanded by the Social Democrats. The world is divided on how to deal with cryptocurrencies like Bitcoin. Proponents point to the security and independence – critics to the high energy consumption and the fight against money laundering and tax evasion. 

The fronts for and against cryptocurrency are increasingly hardening. For some, it is an extremely secure, independent means of payment. For others, it is a climate killer and a license for tax evasion, money laundering, and organized crime. At times, there is no unified solution: the world is still searching for a way to deal with cryptocurrencies.

China, Egypt, and Iran ban cryptocurrency – The Central African Republic allows Bitcoin as a legal tender.

China banned the trade, exchange, and mining of cryptocurrency in 2021. The government justifies the ban with the harmful consequences for the climate and the environment. For example, producing, trading, and paying with Bitcoin consumes more energy annually than Finland and its 5.5 million inhabitants*. 

Egypt, Tunisia, Morocco, Iraq, Bangladesh, and Algeria – more and more countries are following China’s example. In 42 other countries – including Bahrain, Bolivia and Ecuador – there are already laws that amount to an indirect ban. Among other things, these governments prohibited the trading in cryptocurrencies.

In El Salvador, however, bitcoins are already a legal tender. It was the first country in the world to approve the cryptocurrency as an official means of payment. President Bukele wants to use it to reach the 70% of the population that does not have a bank account. Bukele also intend to attract foreign investors. 

Following in the footsteps of El Salvador, the Central African Republic now also allows Bitcoin as an official means of payment. The office of President Faustin-Archange Touadéra announced it at the end of April. 

Europe: Conservatives and right-wingers prevent a sustainability paragraph

Since Facebook officially announced its own cryptocurrency (Diem) in 2020, the European Union has been pondering how to deal with digital currencies. Currently, the EU is negotiating a regulatory package (MiCA) to regulate the digital financial market. Among other things, the package is intended to protect consumers and prevent opportunities for tax evasion and money laundering.

The cryptocurrency sustainability paragraph demanded by European Socialists and Greens was blocked by conservatives in a vote in the EU Parliament in March. The new text contains virtually no commitment to sustainability and leaves a lot of room for interpretation due to vague wording. “The alternative text is pure eyewash and leaves unanswered the disastrous consequences of the growing energy hunger of this industry,” said Jonás Fernández, S&D spokesperson on economic and monetary affairs.


The EU-Parliament adapted the revised text of the MiCA regulatory package on March 14. Now the text goes to the “trilogue”, a formal round of negotiations between the EU Commission, the Council, and the EU Parliament. This is part of the EU’s legislative process. 

A single bitcoin transaction consumes 1.5 million times that of a VISA transaction

The mining of cryptocurrency is extremely energy-intensive. It is because the mining of Bitcoins or other cryptocurrencies requires a great deal of computing power. As a result, the so-called mining consumes more energy than countries like Austria, Switzerland, or Portugal. This is shown by the “Cambridge Bitcoin Electricity Consumption” index. According to this, the Bitcoin network consumes about 22,315 terawatt hours annually. This is equivalent to 0.59% of the world’s electricity consumption. 

Where this energy comes from is not always entirely clear: Analysts estimated the share of renewable energy between 20% to 70%. The corresponding remainder comes from coal, gas or nuclear power plants.

Above all, not only mining, but also paying with cryptocurrency consumes an extremely large amount of energy. For example, the carbon footprint of a single Bitcoin transaction is equivalent to a transatlantic flight from London to New York. “That’s 1.5 million times the energy consumed by a VISA transaction,” criticizes Eero Heinäluoma, a Socialist MEP.


Popular posts from this blog

What all the fuss is about when it comes to forex trading

The ultimate goal of forex trading is to make a substantial sum of money. Some investors have discovered that it is relatively easy to make a significant amount of money in the forex market because of the daily fluctuations. Forex is the abbreviation for the foreign exchange market. Both online and offline, you'll find references to the foreign exchange market. Foreign exchange trading can only be carried out by using a broker or financial institution. Investing in stocks, bonds, and other financial instruments can be done in the same way at these locations. In order to invest in other countries' economies, you need to be aware that you will be sending money to those countries in the form of foreign exchange transactions. This is done in order to boost the investments of hedge fund investors and markets in other countries. Investing in the foreign exchange market allows you to invest your money in different markets at different times. Trading sessions can have many of these oc

Forex Forecasting: How to Avoid the Traps and Become a Successful Trader

Forex is a dynamic market and its pitfalls are many. It is a fast-paced, ever-changing market that poses a challenge to even the most seasoned traders. However, the rewards are great for those who persevere. Forex is one of the most profitable and dynamic markets because of its 24-hour trading flexibility, price volatility and its ability to quickly respond to market changes. This article will explore the pitfalls traders can encounter and how to avoid them. It will also teach you how to become a successful forex trader and how to eliminate the frustrations of trading. What is Forex? In simple terms, forex is the foreign exchange market , which tracks the buying and selling of currencies around the world. It is an open marketplace where currencies can be bought and sold to determine their relative value. The main forex market is the interbank market where banks bring together buyers and sellers of foreign currency with the aim of stabilizing the exchange rate. There are a number of fa

Who is trading in the foreign exchange market?

Trading currencies between countries, as well as deciding when to invest in currencies, is what forex trading is all about. For example, foreign exchange is traded between countries through a broker or financial institution. Foreign exchange trading, like stock trading, has become a popular pastime for many people. Banks, governments and brokers are the primary players in the market while retail traders are known as bystanders. The forex market fluctuates on a daily basis due to changes in the broader financial market. Every day, millions of dollars are exchanged between a number of large countries, and this includes some trade between smaller countries as well. Interbank transactions are the most common in the foreign exchange market, according to research conducted over the years. About half of all transactions in the foreign exchange market are handled by banks. Since the banks are using this method to make money for shareholders and their own business advancement, you know that th