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Norway is planning to impose a temporary ban on the establishment of new data centres that mine cryptocurrency.
Reuters reported that the Norwegian government said on Friday that the temporary ban on new crypto mining data centres is to conserve electricity for other industries.
Norway would not be the first nation or region to ban crypto mining over power consumption concerns.
New York for example in 2022 imposed a two year moratorium on certain bitcoin mining operations that ran on carbon-based power sources.
Norwegian ban
That two year moratorium effectively banned crypto mining in New York for two years, unless the mining operations were powered by 100 percent renewable energy sources.
At the start 2022, Kosovo officially banned cryptocurrency mining, as the Balkan country battled rolling blackouts and an energy crisis, caused by soaring global energy prices and an electricity shortage after its largest coal-fired power plant was shut down over a technical issue.
Now Reuters has reported that Norway aims to impose a temporary ban on the establishment of new data centres that mine cryptocurrency.
“The Labour Party government has a clear intention to limit the mining of cryptocurrency in Norway as much as possible,” Minister for Digitalisation and Public Administration Karianne Tung was quoted by Reuters as saying in a statement.
“Cryptocurrency mining is very power-intensive and generates little in the way of jobs and income for the local community,” she added.
A temporary ban could be introduced during the autumn of 2025, the Norwegian government reportedly said.
Environmental cost
It is widely known that crypto mining typically comes with an environmental cost.
This energy-sapping activity often relies on electricity generated with fossil fuels, particularly coal, depending on the country where it is mined.
The United States for example dominates the global Bitcoin mining landscape, and 60 percent of its electrical grid is powered by fossil fuels.
In October 2021 Cambridge research had estimated that crypto mining consumes 0.45 percent of global electricity production.
The Cambridge Bitcoin Electricity Consumption Index (CBECI), compiled by the university’s Cambridge Centre for Alternative Finance, found this power consumption is increasing.
In 2019 China had accounted for 75 percent of the world’s Bitcoin mining energy consumption, but in June 2021, that country began a crackdown on Bitcoin and other cryptocurrencies.
Beijing then declared all transactions in the digital currency to be illegal.
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