Crypto

Biden Administration Recommends Environmental Standards and Regulations for Crypto | ArentFox Schiff

In a new report issued September 8, the US Office of Science and Technology Policy (OSTP) outlines the environmental and energy impacts of cryptocurrencies and digital assets and calls for the development of federal and state regulations to mitigate those impacts going forward.

OSTP published its report in response to an executive order issued last spring that sought to initiate a broader regulatory framework for digital assets. The OTSP report details the increasing scale and intensive energy usage of the crypto-asset industry and recommends several policy initiatives to ensure the growth of crypto does not hinder greenhouse gas reduction efforts or threaten the stability of electricity grids:

  • The US Environmental Protection Agency (EPA) and US Department of Energy (DOE) should work with state and local regulators and industry leaders to develop performance standards for the design, production, and use of crypto-asset technologies. If needed, Congress should consider legislation authorizing agencies to promulgate federally enforceable rules.
  • DOE and the US Federal Energy Regulatory Commission (FERC) should conduct reliability assessments to gauge the ability of energy systems to handle current and expected crypto-asset electricity demand. The report notes that the scale of crypto-asset operations can change unpredictably in response to the market, which could make it difficult for electricity grids to meet sudden increases in power demand. If the reliability assessments find crypto-asset activities pose risks to the power system, agencies should develop and enforce reliability standards and emergency operations procedures.
  • Finally, federal agencies should conduct research and collect data on the energy usage and environmental impacts of the crypto-asset industry. These efforts should include encouraging the crypto-asset industry to publicly report facility locations, energy usage, and greenhouse gas emissions.

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