Swiss Canton Votes to Examine Bitcoin Mining’s Grid Impact

TLDR

• Canton Bern passed a bill with 85 votes in favor to study Bitcoin mining’s potential impact on energy grids
• The bill aims to explore how mining could utilize surplus electricity and stabilize power grids
• Led by MP Samuel Kullmann and the “Parliamentary Group Bitcoin,” with support from industry leaders
• Executive Council raised concerns about energy competition and regulatory challenges
• Switzerland continues to position itself as a crypto-friendly hub despite the Council’s reservations

The Swiss Canton of Bern has taken a step toward exploring cryptocurrency mining, as lawmakers passed a bill to study how Bitcoin mining could impact the region’s power grid. The legislation received strong support with 85 votes in favor and 46 against, marking a new chapter in Switzerland’s engagement with digital currencies.

Member of Parliament Samuel Kullmann led the initiative through the “Parliamentary Group Bitcoin,” a bipartisan effort aimed at understanding the potential benefits of Bitcoin mining. The bill specifically calls for research into how mining operations could help manage surplus electricity and stabilize the local power grid.

With a clear verdict of 85 to 46 votes the parliament of @kanton_bern demands a report on the potential of #Bitcoin mining to stabilize our #energygrid and the use of otherwise wasted #energy.
The proposal was co-sponsored by @simonryser (Green Liberal Party), @KorabRashiti1… pic.twitter.com/WnTNzNdPi4

— Samuel Kullmann (@samuelkullmann) November 28, 2024

The Executive Council will now prepare a detailed report examining areas in Bern where electricity production exceeds local needs. This study will also look into possible partnerships with Swiss Bitcoin mining companies to make use of excess power generation.

Dennis Porter, CEO of the Satoshi Action Fund, and Julian Liniger, CEO of Bitcoin custody app Relai, provided educational support to help lawmakers understand the technical aspects of Bitcoin mining. Their input helped shape the bill’s focus on energy utilization and grid stability.

The legislation comes at a time when various regions worldwide are examining their stance on cryptocurrency mining. Texas, for example, has shown how Bitcoin miners can act as flexible energy consumers, helping to balance power grids during periods of oversupply.

Bitcoin mining requires substantial computing power to validate transactions and create new coins. This process, known as proof of work, demands considerable energy resources but can be adjusted based on power availability. The study will examine how this flexibility could benefit Bern’s energy infrastructure.

The bill’s passage positions Switzerland further as a crypto-friendly nation in Europe. The country has consistently shown openness to digital currency innovations, with various regions already hosting cryptocurrency businesses and related technology companies.

However, the Executive Council raised several concerns during the legislative process. They noted that most Bitcoin mining currently happens outside Switzerland due to global energy market competition. The Council also pointed out that Switzerland faces increasing power demands from other sectors.

Growing electricity needs from data centers, electric vehicles, and urban development already put pressure on the Swiss power grid. The Council expressed worry about potential price increases and competition for renewable energy resources if mining operations expand.

The regulatory landscape presents another challenge. Since Bitcoin is not considered legal tender in Switzerland, it falls outside traditional monetary policy frameworks. This creates uncertainty about how mining operations would fit into existing financial regulations.

From the Council’s perspective, market forces should determine energy allocation rather than government intervention. They suggested that energy storage technologies might be better suited for managing power surpluses than Bitcoin mining operations.

Despite these reservations, the bill’s approval shows growing interest in exploring innovative uses for excess energy production. Supporters believe Bitcoin mining could create jobs and attract investment while promoting renewable energy development in the region.

The Canton of Bern joins other jurisdictions worldwide taking varied approaches to cryptocurrency mining. El Salvador and Bhutan have embraced mining operations, while countries like Germany have taken different paths, with Germany recently selling a large Bitcoin holding.

In the private sector, companies continue to show interest in Bitcoin. MicroStrategy leads corporate adoption, with firms like Metaplanet and Semler Scientific following suit by holding Bitcoin as a reserve asset.

The approved study will need to address practical questions about implementation, environmental impact, and economic benefits. The report’s findings could influence future policy decisions about cryptocurrency mining in Switzerland and beyond.