The European Commission launches a €800,000 study to examine the environmental effects of cryptocurrencies.

The European Commission launches a €800,000 study to examine the environmental effects of cryptocurrencies.The European Commission handed out a contract worth 800,000 euros ($842,000) on Tuesday as part of its initiatives to address the negative effects of cryptocurrencies on the environment.Concerns about the environmental and climate impact of cryptocurrencies were raised by the European Commission in a tender document published on September 26 under the title \"Developing a Methodology and Sustainability Standards for Mitigating the Environmental Impact of Crypto-assets.\".\"There is evidence that, depending on the consensus mechanism used to validate transactions, crypto-assets can have a significant negative impact on the climate and environment and generate negative economic and social externalities. \".The EU stated that crypto-assets can have significant negative effects on the environment, economy, and society depending on the consensus mechanism used for transaction validation.The Commission has expressed concerns about the potential to undermine the region's climate and sustainability goals outlined in the Paris Agreement in response to the growing demand for crypto-assets and crypto-mining, even within the EU.EU Reacts to Crypto's Impact on Climate Goals and Paris Agreement Objectives.The Paris Agreement was established in 2015 by global leaders to combat climate change. Its main objectives are to keep global warming to well below 2°C above pre-industrial levels, aiming for 1.5°C.The national climate action plans (NDCs) that nations submit to reduce emissions are continually improved. Key factors include financial support for developing countries and transparency.On November 4, 2016, the Paris Agreement went into effect after being ratified by at least 55 countries that together account for more than 55% of global emissions, including all EU members.However, in response to recent pressure from cryptocurrency, the Commission recently took action, for which bids will be accepted until November 10, to establish standards that will support potential future EU policies aiming to lessen the environmental impact of crypto on climate change.This initiative also intends to roll out new energy efficiency labels created specifically for blockchains. The 13-month contract is designed to strengthen the Commission's ability to assess and deal with the effects of crypto-mining on the environment.Furthermore, it aims to define precise sustainability benchmarks for cryptoassets. The ultimate goal is to pass new legislation that will govern how cryptocurrencies are used for financial transactions.EU Adopts Multi-Faceted Approach to Address Environmental Impact of Crypto and Promote Sustainability.Notably, the EU has made numerous investments and launched a number of initiatives to address various issues and advance sustainability, including the 800,000-euro contract for addressing the environmental impact of crypto assets. The European Union's commitment to tackling environmental problems and boosting competitiveness is consistent with its larger objectives, which are outlined in the European Green Deal and the REPowerEU Plan, both of which place a strong emphasis on energy efficiency and the switch to clean energy sources.The EU launched these initiatives in October 2022 in an effort to lessen the environmental impact of various industries. They cover a variety of industries and digital assets like cryptocurrencies. This demonstrates the EU's dedication to putting money into clean energy and developing the abilities required for an effective shift in the industrial sector.The REPowerEU Plan was introduced in response to the conflict between Russia and Ukraine and aims to address the significant effects of this crisis on European energy supplies. According to the European Commission, this situation presents a chance to hasten the transition to clean energy.This plan's energy usage regulation for the information and communications technology (ICT) industry—which includes blockchains as a subset of data centers—is a key component.According to the Commission, the upcoming EU study, which is expected to last a year, will look at issues with crypto's impact on the environment, such as how much water it uses, how much waste it produces, how it uses energy, and so on..