The Central Bank of Iceland’s Financial Supervisory Authority has no supervision over cryptocurrency mined in Iceland, Fréttablaðið reports. A considerable portion of the world’s supply of bitcoin, or up to 8%, is mined in data centres in Iceland.
The Financial Supervisory Authority has no information on and does not supervise cryptocurrency mined in Icelandic data centres. It’s believed that up to 8% of bitcoin is mined in Iceland. Around 60 companies mine bitcoin in Iceland but only the three service providers offering electronic currency trade and digital wallets are required to register with the Financial Supervisory Authority.
While cryptocurrency has been lauded as an ultra-secure decentralised mode of payment, it has come under fire for being ill-regulated and wasteful of energy. US authorities have increasingly tried to supervise the use of cryptocurrency as they are thought to be the cornerstone of various illegal operations, including terrorism, drug trade and the distribution of child pornography. Mining cryptocurrency requires a great deal of energy use. Around 5% of Iceland’s energy production is tied in data centres and around 90% of data centre operations centre on cryptocurrency mining.
When asked about cryptocurrency supervision, The Central Bank of Iceland’s Financial Supervisory Authority replied that as cryptocurrencies aren’t legal tender or currency in Iceland so they aren’t subject to legislation on payment services or electronic currency. “Cryptocurrency markets don’t require a licence, they are not subject to laws no. 108/2007 on stock exchanges and aren’t subject to Central Bank of Iceland’s Financial Supervisory Authority’s supervision.” Furthermore, the Central Bank does not have any information on the extent of cryptocurrency trade. Even if the Financial Supervisory Authority does not supervise cryptocurrency trade, they warn against its use.