EU Officials Consider Banning Bitcoin Trading: Report

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  • New documents reveal the scale of anti-Bitcoin talks between European Union officials.
  • Officials considered a ban on Bitcoin trading as well as a ban on Proof-of-Work mining to reduce power usage in the network.
  • EU representatives also asked if Bitcoin could switch to a less energy-intensive Proof of Stake validation mechanism.

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A document obtained through a Freedom of Information Request reveals measures that EU officials have considered to help curb Bitcoin’s energy use. In addition to claiming the highest cryptocurrency exchange with a proof-of-stake validation mechanism, the document notes that there is an outright ban on card trading as well.

EU Officials on Bitcoin

New documents reveal that EU officials do not like Bitcoin.

Digital rights organization Netzpolitik published a report Thursday highlighting the extent of anti-Bitcoin talks among EU officials. Several documents obtained through Freedom of Information requests reveal the progress of discussions on banning bitcoin mining and trading in the European Union.

A document containing the minutes of an EU meeting with the financial supervisor and the Swedish Environmental Agency discussed the growth of Bitcoin mining in the country. One speaker wondered if the authorities could pressure Bitcoin to move to a less power-intensive proof-of-stake validation mechanism. The document stated:

“If Ethereum is able to transform, we can legitimately demand it from BTC. We need to “protect” other sustainable cryptocurrencies. Don’t see [the] Need to “protect” the “Bitcoin community”.

At the same meeting, another speaker openly questioned whether the European Union should impose a blanket ban on crypto-asset trading based on Bitcoin’s Proof of Work algorithm. Although the answer to this question has been revised to protect ‘ongoing decision-making’, it highlights that such measures have been clearly under consideration.

However, the most damning statement came at the end of the meeting as officials discussed the consequences of a possible ban on investors. “how do you want [the] Does the disappearance of bitcoin affect consumers? “Asked one concerned person. BTC participants are fully aware of currency fluctuations/investment risks. You don’t need additional protection measures,” he wrote in response.

The participants in the discussion seem disinterested in the thousands of individuals around the world for whom Bitcoin is a lifeline. From Ukrainians using cryptocurrencies to help them flee war to Argentines investing in Bitcoin to escape inflation, the European Union appears to be ignoring the merits of Bitcoin’s peer-to-peer decentralized payments system while instead focusing only on energy use.

The fundamental lack of understanding of cryptocurrencies was further highlighted when one of the people involved asked, “What service does Bitcoin provide that Solana does to society? If I can prove that other cryptocurrencies can work without proof of work, why can’t Bitcoin?”

For all the advantages that Solana offers, it is much more centralized than Bitcoin, and primarily operates under the control of the Solana Foundation. On the other hand, Bitcoin is more decentralized, allows excess capacity to be transferred into an asset of value, and provides a more reliable and unsupervised means of peer-to-peer value trading.

This lack of understanding is evident in calls for a “token change,” a reference to Greenpeace’s recent campaign to get Bitcoin to move from Proof-of-Work to Proof-of-Stake. While this slogan is popular among EU politicians and environmental organizations, these groups fail to understand that Bitcoin is not as heavily influenced by any single entity like Solana. There is no group that you can press in order to bend Bitcoin to your will; It is a decentralized network of individual actors.

While the document Netzpolitik published today was interesting, it covers a meeting that took place in November 2021. Since then, the EU Parliament has voted against legislation calling for a ban on Proof of Work extraction. However, the document does give an insight into the approach of some EU officials to regulating bitcoin. While proof-of-stake cryptocurrencies appear to be safe, it appears likely that Bitcoin will remain a contested issue in European politics.

Disclosure: At the time of writing this article, the author owns ETH and several other cryptocurrencies.

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