The Banking Executive Magazine - November 2022 Issue

Cryptocurrency technologies. This landmark Execu- tive Order shows that governments are beginning to recognize that the debate around cryptocurrency and the environment should not focus just on energy consumption, but on positive projects that are bringing much needed transparency and liq- uidity to carbon markets. RESPONSIBLE DEVELOPMENT OF DIGITAL ASSETS In the Executive Order on Ensuring the Responsible Development of Digital Assets, United State president Joe Biden made clear that the re- sponsible development of digital as- sets includes reducing negative climate impacts and environmental pollution. To ensure the responsible develop- ment of digital assets, key recom- mendations of the White House report that analysed climate and en- ergy implications of crypto assets in the United States include the follow- ing actions for consideration: • Minimizing greenhouse gas emis- sions and environmental impacts: Environment and energy agencies should provide technical assis- tance and initiate a collaborative process with states, communities, the crypto-asset industry, and others to develop effective, evi- dence-based environmental per- formance standards for the responsible design, development, and use of environmentally re- sponsible crypto-asset technolo- gies. • Ensuring energy reliability: Assessments of reliability and ade- quacy of current and projected crypto-asset mining operations on electricity system should be con- ducted. Reliability standards should be enforced and emergency operations procedures to ensure system reliability and adequacy should be undertaken. • Gathering data to understand, monitor, and mitigate impacts: Various efforts should be under- taken to collect and analyse infor- mation from crypto-asset miners and electric utilities in a privacy- preserving manner to enable evi- dence-based decisions on the en- ergy and climate implications of crypto-assets. Data should include mining energy usage and fuel mix, power purchase agreements, envi- ronmental justice implications, and demand response participation. • Advancing energy efficiency standards: Regulators should promulgate and regularly update energy conserva- tion standards for crypto-asset min- ing equipment, blockchains, and other operations. • Encouraging transparency and improvements in environmental performance: Crypto-asset industry associations, including mining firms and equip- ment manufacturers, should be en- couraged to publicly report crypto-asset mining locations, an- nual electricity usage, greenhouse gas emissions using existing proto- cols, and electronic waste recy- cling performance. ISSUE 167 NOVEMBER 2022 the BANKING EXECUTIVE 35