The UN-sponsored Intergovernmental Panel on Climate Change (IPCC) has cited cryptocurrencies as one of the risk factors for the environment.

In the Climate Change Mitigation report, experts emphasized that “without sudden and significant reductions in carbon emissions across all sectors, limiting global warming to 1.5°C is unachievable”.

According to them, advances in information storage, processing and transmission technologies can help reduce emissions. This will happen by improving control of energy efficiency, reducing the cost of operations in the generation and transmission of energy, as well as reducing the need for physical transportation.

“However, data centers and their associated energy-intensive IT systems (including blockchain) will drive demand – cryptocurrencies can be a global source of CO._2ndif electricity generation is not decarbonized. There is also a concern that information technology may exacerbate existing inequalities,” the authors of the report said.

They noted that digitalization, automation and artificial intelligence as general-purpose technologies could lead to many new products and applications. These solutions can be effective on their own, but can lead to an increase in electricity demand.

“While the energy requirements for cryptocurrencies are also a growing concern, there is significant uncertainty regarding its use by the underlying blockchain asset infrastructure,” the IPCC document states.

Recall that in November 2021, the heads of two Swedish regulators said that mining bitcoin and other cryptocurrencies in the Proof of Work algorithm will prevent the EU from meeting its obligations to reduce carbon emissions. They proposed banning this method of mining assets.

In January, one of them, Eric Theden, was already appointed as Vice President. ESMAreiterated the EU’s call for a ban. His view was supported by the head of the Hungarian Ministry of Finance, Gyorgy Matolchi.