Left-wing parties want to ban Bitcoin trading at Zurich Cantonal Bank

On September 4, Zürcher Kantonalbank (ZKB) announced that it would enable its customers based in Switzerland to buy and sell Bitcoin and Ethereum via eBanking or the ZKB app. Switzerland's fourth-largest bank is solely responsible for the custody of the coins. However, sending and receiving cryptocurrencies and other services such as staking are not yet possible.

This new offer from ZKB angered the left-wing parties in Switzerland. In a joint parliamentary statement by the Alternative List (AL) and the Greens, they call on the bank to stop trading in Bitcoin and fulfill its climate commitments.

The reason for this demand is the climate-damaging effects of Bitcoin's proof-of-work concept, which requires high computing power and therefore a lot of energy.

In 2023, the network consumed two and a half times as much electricity worldwide as the whole of Switzerland and caused greenhouse gas emissions of around 90 million tons of CO₂, twice as much as Switzerland's emissions. And all this without Bitcoin being able to demonstrate any direct economic benefit.
_{Excerpt from the parliamentary group statement}

The parties refer to these figures as "clear facts", although the sources are not cited in the parliamentary group statement. The fact that there are numerous scientific sources that prove the positive benefits of Bitcoin for the environment and society and invalidate the old narrative of Bitcoin being a "climate killer" is something that the left-wing parties do not seem to want to acknowledge. The scientific consensus has long since reflected a different opinion on the impact of Bitcoin on the environment and society, so that conscientious research can actually be ruled out in the group statement. Or the facts were simply ignored:

Figures from the Digital Assets Research Institute illustrate that sustainable energy sources account for more than 56 percent of the Bitcoin network's energy mix. This makes this global industry one of the most sustainable sectors there is. 
In addition, other countries, such as Japan and the USA, are already integrating Bitcoin mining facilities into their power grids. The Bitcoin mining industry is actively helping to reduce emissions, utilize unused surplus energy and promote the expansion of renewable energies. There are also innovative concepts for stabilizing power grids and utilizing waste heat.

In view of the scientific consensus on the subject, it is therefore difficult to understand why the left-wing parties are calling for Bitcoin trading to be discontinued in light of the climate targets and commitments that ZKB has entered into, including as part of the Net-Zero Banking Alliance (NZBA).

The argumentation of the left-wing parties becomes clearly dubious when using the metric "per transaction".

In 2020, the Dutch Central Bank calculated a carbon footprint of no less than 402 kg of CO₂ per Bitcoin transaction, and the trend is rising. According to calculations by myclimate, a single Bitcoin transaction is therefore just as harmful as a flight from Zurich to Istanbul on board a Boeing 737.
_{Excerpt from the fraction statement}

This metric is based on the controversial and repeatedly refuted statements of Alex de Vries, an employee of the Dutch Central Bank and opponent of Bitcoin. These are more than just inaccurate and it is actually irresponsible to circulate this metric again, as it has nothing whatsoever to do with reality.

The data on resource consumption per transaction comes from a non-peer-reviewed commentary by Alex de Vries (central bank employee). His method has been refuted in a peer-reviewed study and by the Cambridge Judge Business School.
_{Daniel Batten, Bitcoin and climate activist}

At the same time, the parties praise Ethereum's ecological footprint and recommend it as a better alternative to Bitcoin. Thanks to the proof-of-stake concept, the CO₂ emissions would only be a fraction of Bitcoin.

However, the authors of the fractional declaration did not take into account that the consensus mechanism of Proof of Work (PoW) also offers advantages over Proof of Stake: The use of real resources and the high cost of equipment and energy creates an anchor of the digital asset in the physical world, making the network valuable, decentralized and independent of a central authority. Furthermore, the PoW reinforces the centralized value proposition as a monetary asset as well as Bitcoin's status as a digital commodity.

A PoS network is not anchored in the physical world, but purely virtual, so the parameters are easily changeable. With PoS, real capital costs are only incurred for the acquisition of tokens that legitimize the holder for the validation process. Participants with large stakes have a continuous advantage over participants with fewer stakes. This is ultimately a danger for the network, as decentralization and therefore security could be called into question.

While Bitcoin has already become an integral part of investment and energy strategies in other parts of the world and the scientific consensus regarding its environmental impact is rather positive, in Europe people often still emphasize the allegedly negative aspects of the largest cryptocurrency in order to pursue their own agenda. It is worrying that numerous facts on the subject and therefore the opportunities that Bitcoin offers continue to be ignored, even though the old narrative of Bitcoin being harmful to the climate is long outdated. It is to be hoped that the Zürcher Kantonalbank will not allow itself to be unsettled by the left-wing parties and not respond to their absurd demands.