The European Central Bank (ECB) has taken a look at the environmental impact of using banknotes and discovered 16 environmental impact categories. As with cryptocurrency, energy efficiency was a major issue.
Banknotes continue to be the most common form of payment at points of sale in the eurozone. The use of cash requires an elaborate physical infrastructure for production, distribution, and eventual retirement.
Energy use by ATMs was the biggest contributor to banknotes’ environmental footprint at 37%, followed by transportation (35%). The remainder was processing, paper manufacturing, authentication and many other steps. The ECB began efforts to reduce the environmental impact of banknotes in 2004. According to the ECB report:
“The energy consumption of ATMs, for instance, has already fallen by 35% between 2004 and 2019, even though ATMs have significantly increased in number. We are also looking into further reducing the impact of transportation.”
Using European Commission Product Environmental Footprint (PEF) methodology, the study concluded that cash usage by every citizen in the eurozone annually averaged 101 micropoints, comparable to driving a car 8 kilometers (4.6 miles). The total average impact of a citizen of the European Union was just over 1 million micropoints, equivalent to driving a car around the Earth twice. Those calculations were based on information for 2019.
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Those statistics compare favorably with Bitcoin mining, whose impact researchers have managed to quantify in terms of millions of swimming pools full of water. However, crypto mining is becoming more efficient, and the potential for crypto mining to mitigate its environmental impact is growing rapidly.
Did you know the environmental impact of using euro banknotes is very low?
Our study reveals that a person’s yearly payments using euro banknotes has the same impact as driving 8 km by car.
Find out more https://t.co/FuSUNpAKGN pic.twitter.com/YDmBnl4S4x
— European Central Bank (@ecb) December 11, 2023
Also, crypto miners can have certain unique advantages if they pursue them. Mining facilities can be easily installed on fossil fuel production sites to use production byproducts. Crypto miners have even been set up at landfills to siphon off methane, and miners can stabilize energy grids.
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