US Congress will force crypto miners to switch to green energy
Most Western investors have started to follow the principle of responsible investing, thus, taking into account the impacts of companies on the environment.
The US Congress passed a law requiring companies to disclose ESG (Environmental, Social, and Corporate Governance) parameters that are consistent with the principles of environmental, social, and industrial governance. All companies whose shares are listed on the US stock exchanges will have to submit their reports with the ESG indicators to the SEC – the Securities Commission.
The rule of law is to protect investments from breaches of financial obligations, defaults, bankruptcies and market bubbles. Standard indicators in reports should include environmental criteria for impact on nature, social criteria for relations with employees, customers and society, as well as principles of corporate governance of the company. High characteristics of all parameters will provide the business with a harmonious and balanced development that affects investment and the value of shares.
Environmental impact is being prioritized, and this could hit mining stock prices which are steadily increasing on the US stock exchanges. The entry of mining farms on stock exchanges with access to large investments can be a big question. Mining companies may not go through the listing procedure – inclusion of securities in the list of exchanges due to non-compliance with ESG standards.
An advisory committee will be set up by the SEC to develop regulations on unacceptable environmental impacts. If the standard indicators are violated, the securities will be excluded from the list of quotations and will not be traded on the exchange (delisting).
Bitcoin mining consumes a huge amount of electricity, which is socially unjustified: farms do not create jobs. In terms of technology, blockchain as a cryptocurrency payment network could become greener. For the largest cryptocurrency mines, the use of renewable energy sources will become a survival method. Meanwhile, the Chinese government intends to close all crypto mining farms in China, regardless of the energy source used.