Office Of Science And Technology Publishes EO Report On Crypto-Assets – Fin Tech – United States – Mondaq

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Last week, in accordance with President Joe Biden's Executive Order on Ensuring Responsible Development of Digital Assets, an interagency group led by the White House Office of Science and Technology Policy published its report titled “Climate and Energy Implications of Crypto-Assets in the United States.” The 46-page report “explores the challenges and opportunities of crypto-assets for energy and climate change issues in the United States, and answers four main questions asked in Executive Order 14067.”
The first question addressed by the report is “How do digital assets affect energy usage, including grid management and reliability, energy efficiency incentives and standards, and sources of energy supply?” In response, the report notes that “[f]rom 2018 to 2022, annualized electricity from global crypto-assets grew rapidly, with estimates of electricity usage doubling to quadrupling.” According to the report, “[a]s of August 2022, published estimates of the total global electricity usage for crypto-assets are between 120 and 240 billion kilowatt-hours per year, a range that exceeds the total annual electricity usage of many individual countries, such as Argentina or Australia.” The report also notes that “[a]s of August 2022, Bitcoin is estimated to account for 60% to 77% of total global crypto-asset electricity usage, and Ethereum is estimated to account for 20% to 39%.”
The second question addressed by the report is “What is the scale of climate, energy, and environmental impacts of digital assets relative to other energy uses, and what innovations and policies are needed in the underlying data to enable robust comparisons?” Among other things, here the report notes that “[c]rypto-asset activity in the United States is estimated to result in approximately 25 to 50 Mt CO2/y, which is 0.4% to 0.8% of total U.S. GHG emissions, similar to emissions from diesel fuel used in railroads in the United States.”
The third question addressed by the report is “What are the potential uses of blockchain technology that could support climate monitoring or mitigating technologies?” The report answers this question, in part, by stating, “There is potential for blockchain technologies to play a role in environmental markets, and DLT could potentially enable distributed energy resource coordination, as well as broader supply chain management.”
The fourth and final question addressed by the report is “What key policy decisions, critical innovations, research and development, and assessment tools are needed to minimize or mitigate the climate, energy, and environmental implications of digital assets?” In summary, the report finds that “[t]o help the United States meet its climate objectives … crypto-asset policy during the transition to clean energy should be focused on several objectives: reduce GHG emissions, avoid operations that will increase the cost of electricity to consumers, avoid operations that reduce the reliability of electric grids, and avoid negative impacts to equity, communities, and the local environment.”
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