BANKING of cryptocurrencies as existing only in a digital sense , the carbon emissions associated with it are very real . Bitcoin mining is said to have the same electrical power generation as a mediumsized European country . The problem with bitcoin is that mining is concentrated in the hands of very few global players ; research from the National Bureau of Economic Research ( NBER ) suggests that just 0.1 % of miners are responsible for 50 % of mining capacity . That makes it exceptionally difficult to make improvements to the way in which bitcoin is mined – for instance , by making a concerted effort to adopt renewables in place of fossil fuels .
And Simon Thompson believes we have to think more broadly about what we include within the scope of fintech ’ s carbon footprint . He says : “ It ’ s
“ It ’ s not just the direct emissions created by fintechs and their suppliers ; it ’ s the indirect , financed emissions that we need to focus on ”
SIMON THOMPSON CHIEF EXECUTIVE , THE CHARTERED BANKER INSTITUTE
Bitcoin mining is said to have the same electrical power generation as a medium-sized European country
not just the direct emissions created by fintechs themselves , and their suppliers ( especially their energy providers ) – the Scope 1 and Scope 2 emissions in the jargon .
“ Rather it ’ s their Scope 3 emissions – the indirect , financed emissions – that we need to focus on . What are fintechs financing and encouraging their users to buy , consume , lend to or borrow ? Are they supporting high carbon business models and consumption or encouraging low carbon , more sustainable models ?”
The danger of greenwashing Fintechs need to show that they are taking action to address climate change , but they cannot rely on token gestures or empty
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