The bitcoin (BTC) mining sector has recently flourished in Sweden, where it is gaining from government initiatives to improve the country’s energy balance. There, BTC mining has also grown to be one of the most active in Europe. But the economic recovery and rising electricity demand pose a threat to its sustainability.
Economic recovery while undermining BTC
Energy Minister Khashayar Farmanbar suggested the prospect of stopping the delivery of electricity to mining businesses in BTC despite the economic rebound and fast rising demand from Sweden’s manufacturing sector. An arbitration that shows the authorities’ desire to put the growth of the nation’s overall economic value chain first and not devote too much time to BTC technology.
The country first brought up the idea of outlawing BTC last year.
If the legislation is put into effect, miners will no longer receive the preferential treatment they do with regard to the cost of purchasing power, which should undermine their finances, slow down activity, and finally drive them to leave the nation.
- “We need energy for more useful things than bitcoin, to be honest (…) The Swedish economy is going “from a period of administration to extreme expansion where our whole manufacturing industry is looking to electrify itself” , said the leader, at the microphone of Bloomberg .
The optimum strategy to implement this action is currently being discussed at the level of the energy sector’s top executives. Two solutions are reportedly being studied, according to the press. The first would be to continue to support mining businesses that provide the Swedish company with additional added value. The second option would be to restrict the scope of their preferred tax status, which would result in higher taxes.
Higher tax costs, in Erik Thornstrom’s opinion, would drive out miners and draw larger corporations in terms of added value. He is a senior adviser to the industry association Swedenergy.
Sweden has one of the most advanced renewable energy industries in all of Europe. Clean energies make up more than half of the energy mix. BTC miners have recently been drawn to this cheap energy. However, the state wants to make sure that this new capital has enough vitality to function given the post-Covid-19 economic recovery. This will broaden the economy and promote economic expansion.
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