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The Norwegian government is preparing to take a new step towards cryptocurrency mining facilities, which are notable for their high energy consumption.
Norway’s Labor government plans to temporarily ban the construction of new crypto mining data centers that use energy-intensive “proof-of-work” systems, according to Reuters. Proof-of-work systems are a key part of Bitcoin, the world’s largest cryptocurrency, and are used to secure the network.
If approved, the ban is expected to come into effect in the fall of 2025. The government’s main goal is to preserve the country’s electricity capacity for more efficient and productive sectors.
“Cryptocurrency mining consumes a lot of energy and contributes little in terms of employment or income to local communities,” Norwegian Minister of Digitalization Karianne Tung said in a statement. Tung also noted that this move is a clear indication of the government’s intention to limit cryptocurrency mining in Norway as much as possible.
Norway has long been a favorite of bitcoin miners looking for low-cost, clean energy thanks to its abundant renewable hydropower. Companies like Kryptovault, near Oslo, operate data centers that consume up to 40 MW of power and recycle the heat to dry wood or heat buildings.
But despite the renewable energy infrastructure, the need for continuous and high-capacity energy from these mining facilities is increasingly considered by regulators as a waste of resources that should be directed to more efficient areas such as industry, heating or artificial intelligence data processing.
However, Norway only has a proportional impact of 0.74% in terms of hashrate, the measure of Bitcoin mining, and is ranked as the 11th most mined country.
*This is not investment advice.
