Alice-Mary Higgins (Independent) | Oireachtas source

-----in relation to particular loans. The two areas of risk that are interlinked, which I am hoping the witnesses can shed more light on, are cryptocurrencies and crypto assets, and climate. I want to get a sense of what the strategies are, what assessments are being made and what actions are being taken in these areas. The Central Bank has produced a useful briefing on crypto assets and acknowledged that there is a financial risk involved with them. We know there is a lot of debate on whether or not crypto assets should be allowed to be included within investment portfolios and that there is a financial risk component to that. I am of the opinion that we should not be allowing that but I would like the witnesses' views on that.

On a wider level, in the briefing the Central Bank mentioned and acknowledged the fact that there is a huge sustainability risk in how energy intensive cryptocurrency and crypto assets are. They are creating extreme pressure in energy usage in some cases. The Central Bank used the example of the Cambridge Bitcoin electricity consumption index, which highlighted that Bitcoin uses more energy in a year than entire countries like Norway. Kazakhstan is another pertinent example, which last year was the second largest cryptocurrency mining country in the world with some mines running 50,000 computers. That has led to and contributed to an energy crisis and political instability in Kazakhstan.

I am on the Joint Committee on Environment and Climate Action as well as this committee so this is an area of real concern to us. In the Joint Committee on Environment and Climate Action we are hearing potential predictions, which are worrying, that data centres in Ireland could be using up to 33% of our national electricity by 2030. A frank discussion we have had is that this is an energy crunch. I slightly disagree with Mr. Makhlouf as he seemed to suggest that it is a temporary supply bottleneck but we know the energy transition is substantial. It is not simply a matter that the oil and gas will start flowing again. We are in an energy crunch, in terms of having sufficient renewable energy for the next five to ten years and of how we manage our energy. We need to look at demand reduction. In that context, is mining cryptocurrency or processing crypto assets a responsible use of electricity and energy over the next period of time? What is the Central Bank looking at in that area? I know the digital financial package and distributed ledger technology are being looked at as a pilot but besides that pilot at the EU level, what are the national regulation options or moratoriums we could be looking at for crypto assets and cryptocurrency? Has a risk assessment been conducted or will a risk assessment be conducted by the Central Bank as part of its multi-year strategy on the implications of crypto assets for our climate targets and the net zero carbon economy goal it outlined in its presentation?