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Biden Orders Report on Climate Risk of Cryptocurrencies

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order says.

Biden also directed the report to examine the energy use associated with so-called proof-of-work and proof-of-stake methods for verifying transactions on open-source blockchains. That examination should include “research into potential mitigating measures and alternative mechanisms of consensus and the design tradeoffs those may entail.”

The order specifically calls for more study of “potential uses of blockchain that could support monitoring or mitigating technologies to climate impacts,” such as verifying carbon offsets. And the paper should consider the “implications for energy policy, including as it relates to grid management and reliability, energy efficiency incentives and standards, and sources of energy supply.”

The interagency group has until Sept. 5 to produce the environmental report.

Rep. Darren Soto (D-Fla.), co-chair of the bipartisan Congressional Blockchain Caucus, and other cryptocurrency advocates have claimed that adding energy-hungry computers that produce new digital tokens could help encourage the construction of new renewable energy projects. But critics, such as Massachusetts Sen. Elizabeth Warren and other Democratic lawmakers, point to instances where cryptocurrency miners have instead propped up aging fossil-fuel-fired power plants that would’ve otherwise been retired (E&E Daily, Feb. 1).

Meanwhile, independent researchers have found that the annual emissions associated with bitcoin—the first and most valuable cryptocurrency—now rival those produced by the entire country of Greece (Greenwire, Feb. 25).

Biden’s digital assets order was primarily focused on protecting U.S. citizens from cryptocurrency financial risks, reducing their use in illicit activity such as ransomware schemes that have shut down major energy infrastructure and maintaining the primacy of the U.S. dollar in the global financial system.

The presidential directive also placed “the highest urgency on research and development efforts into the potential design and deployment” of a U.S. government-issued central bank digital currency. China is one of more than 100 countries that is already exploring or piloting the use of CBDCs, which are a digital form of their sovereign currency.

Reprinted from E&E News with permission from POLITICO, LLC. Copyright 2022. E&E News provides essential news for energy and environment professionals.

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