Key Takeaways:
- A bill proposed by a bipartisan Bitcoin committee in March 2024 to study the potential impact of Bitcoin mining in the Swiss canton of Bern has been passed by the local parliament with a majority.
- The bill co-sponsored by lawmakers Samuel Kullman, Simor Ryser, Mathias Mueller, Korab Rashiti, and Philipp Kohli, will require the Bern government to study the availability of excess energy in the region and how it can be utilized for producing Bitcoin.
- The local government opposed the bill, citing that the energy consumption of the mining operation is a global issue and that the cryptocurrency could not be regulated by the central bank as it is not considered legal tender in the country.
- Switzerland is the fifth largest Bitcoin node operator in Europe, representing 2% of the entire blockchain. The country is an attractive prospect for miners due to its year-round cool climate and availability of clean energy.
Lawmakers in the parliament of the Swiss canton of Bern have passed a historic bill to study the impacts of Bitcoin mining in the region. The legislation, proposed by a pro-crypto bipartisan parliamentary group, was voted in a majority after months of effort to drive crypto adoption rates in the canton.
Switzerland is composed of 26 cantons, each with its own constitution, government, and laws to manage local affairs.
Bern Parliament Passes Landmark Bill To Study The Possibility of Bitcoin Mining In The Swiss Region
According to details shared by Samuel Kullmann, a member of the Federal Democratic Union of Switzerland (EDU) party, the bill passed with an overwhelming majority in support, where the verdict had 85 votes in favor and 48 against the move. Kullman co-sponsored the bill along with Simor Ryser, a member of the Green Liberal Party; Mathias Meuller, and Korab Rashiti of the Swiss People’s Party; and Philipp Kohli, a member of the Center Party.
Following the bill’s passage, the parliament has asked the Cantonal government to prepare a report to analyze the potential availability of excess energy production and how mining operations can tap the surplus to produce Bitcoin.
The proposal touched upon the flagship crypto asset’s appeal, stemming from its fixed supply cap of 21 million coins. The bill states that Bitcoin’s “guaranteed scarcity” makes it an interesting alternative for people seeking a store of value “beyond traditional currency systems”.
The bill, introduced to the parliament in March 2024, is the brainchild of the 23-member non-partisan Parliamentary Group Bitcoin, aimed at ensuring that Bern is prepared for the digitization of its financial sector. The legislation also takes into account other countries and regions that have supported Bitcoin mining as a way to use various forms of excess energy generation.
However, the local government made several attempts to prevent the bill’s implementation, with the government council stating that the energy consumption by Bitcoin mining farms was a global issue and did not pertain to Bern’s energy grid. Another concern portrayed by the council was that no government or central bank could track or control the issuance of BTC as it is not considered a legal tender in Switzerland.
Bitcoin mining operations are increasingly local, seeking regions with specific energy production and the right climate for easier functioning of the mining rigs. Switzerland already redirects 3.6% of its energy grid to general data centers, a key point that led to the bill’s majority approval despite heavy backlash.
Switzerland Hosts 2% of Bitcoin Nodes, Ranking 9th In The World And 5th In Europe
The legislation further cements Switzerland’s reputation as one of the most crypto-friendly jurisdictions, not just in the European Union, but also globally. The country is home to some of the largest crypto firms and is among the top 10 territories with Bitcoin node availability.
Switzerland hosts a total of 971 nodes, representing 2% of the entire Bitcoin network. While the country is ranked ninth in the world, it is the fifth-largest node host in Europe, after Germany, France, Netherlands, and the UK.
The largest Bitcoin mining facility in the country is the Linthal region and has been operational since 2016. The mining farm, owned by Guido Rudolphi, capitalizes on Switzerland’s dominance in hydroelectric power and the region’s attractive electricity prices. Hydroelectric power is one of the most preferred and cleanest energy sources for producing Bitcoin.
Over 60% of the country’s power generation comes from its mountainous terrains and rivers. Hydroelectric power combined with a cooler climate makes Switzerland a prime location for Bitcoin mining companies.
Another country with a similar profile is Bhutan, which has gone in the direction of government-controlled mining operations since 2020, where the cryptocurrency is produced by utilizing power from gas flares and geothermal power from volcanoes.
Other countries actively engaged in Bitcoin mining include the United States, El Salvador, Nicaragua, Argentina, and Oman.
The critiques of Bitcoin mining speculate that the blockchain has higher energy usage than the yearly consumption of Finland. However, innovation has led to the growth in power for mining operations slowing down, as machines and their cooling systems have become more efficient.
At the time of writing, Bitcoin (BTC) is trading at $96,335 – up 0.89% in the last 24 hours.
