Norwegian authorities aim to restrict cryptocurrency mining through a new law intended for data centers in the country.
Based on a report from local news source VG, a new regulatory framework is proposed, requiring data centers to officially register and disclose details such as ownership and management, in addition to the types of services they provide. This legislation marks a first for Europe, making Norway a trailblazer in regulating the data center sector.
“Digitalization Minister Karianne Tung expressed that our goal is to control the industry and prevent unwanted projects from moving forward.”
This new law aims to empower local government officials with greater authority overseeing data center operations. By doing so, they can make wiser decisions on whether to allow or deny these centers based on informed assessments. Advocates of the legislation expect that it will lead to more effective management of local data infrastructure.
Additionally, regulatory bodies have made it clear that they do not support crypto-mining activities. Minister Terje Aasland voiced worries over the environmental impact of cryptocurrency mining due to its significant greenhouse gas emissions.
Aasland stated that such businesses are linked with substantial greenhouse-gas emissions and don’t align with Norway’s values. Moreover, they have no intention of welcoming enterprises solely seeking affordable electricity.
Norway is Europe’s leading producer of hydroelectric power, with over half of its electricity coming from renewable sources. This makes Norway an attractive destination for cryptocurrency miners due to the affordable electricity rates in the area. According to a 2023 study, mining companies in northern Norway, which has the lowest electricity prices, collectively consumed as much power as the Lofoten district.
Currently, the exact number of Bitcoin mining companies in operation within Norway’s borders remains undisclosed to regulatory authorities. Nevertheless, the upcoming legislation is expected to provide greater transparency on this issue and contribute to carrying out Norway’s digital border initiatives, as mentioned by Tung.
With Norway stepping up its watchful eye, the cryptocurrency mining sector as a whole is experiencing weakened returns. Notably, shares in prominent Bitcoin mining companies such as Marathon Digital Holdings and Riot Platforms have been declining significantly during the last few weeks.
This week marks the occurrence of Bitcoin’s fourth halving event in the crypto industry, and mining profits may necessitate the sale of approximately $5 billion in Bitcoins by miners, as per 10x Research Head Markus Thielen’s forecast.
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2024-04-17 13:32