08-28-2026 
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- Higher EU carbon costs hit miners
- Study links Bitcoin to Russian emissions
- Bitcoin Policy UK flags banking barriers for Bitcoin
- Crypto ownership rises despite banking limits
The European Union’s climate policy may be unnecessarily hampering growth in the digital asset industry, according to a new study suggesting that the bloc’s higher carbon prices might be encouraging block reward miners to relocate their emissions-intensive operations elsewhere. Meanwhile, the digital asset industry faces different challenges in the neighboring United Kingdom, where a prominent bitcoin advocacy group has accused the country’s banking sector of locking out crypto.
EU carbon prices causing miner exodus
A new study, published on August 21 by Vietnamese researchers, found that higher carbon prices in the EU may be encouraging emissions-intensive block reward mining operations to abandon the region, with Russia a favored destination.
In 2005, the EU launched its Emissions Trading System (EU ETS) to reduce greenhouse gas emissions. The system operates on a “cap-and-trade” basis, meaning it sets a limit on the total amount of greenhouse gases that covered installations and operators can emit, with the cap reduced over time to drive emissions reductions.
Companies must surrender one EU allowance for every tonne of CO2-equivalent they emit, with allowances primarily auctioned. Firms can also trade allowances with one another, meaning those that reduce their emissions can sell or bank allowances they no longer need. Companies that fail to surrender sufficient allowances are subject to a penalty of €100 per ($116.5) excess tonne, adjusted for inflation, and must still surrender the missing allowances.
Problems arise with this system for certain electricity-intensive industries, such as block reward mining, as the carbon price can be passed through from electricity generators to industrial consumers via higher electricity prices, creating significant indirect carbon costs for those firms.
Russia, by contrast, has imposed less carbon-related cost than the EU ETS, and its electricity system relies heavily on relatively inexpensive domestic natural gas, alongside substantial nuclear and hydropower generation, making it a more favorable destination for electricity-intensive industries.
Therefore, digital currency miners may find locations with cheaper and less carbon-intensive electricity more attractive, potentially encouraging investment to move outside the EU.
This was explored in a new study by researchers at the University of Economics Ho Chi Minh City and the Banking University of Ho Chi Minh City, which used daily observations from January 2019 to January 2026 to examine the relationship between bitcoin prices, European carbon allowances, and changes in power sector carbon emissions.
The researchers compared the EU with Russia and the rest of the world using statistical models, finding a positive relationship between Bitcoin activity, European carbon prices, and electricity-sector emissions in Russia, particularly during periods when Russian emissions were relatively low. The pattern was consistent with the possibility that some emissions were being displaced from Europe to Russia during the period under examination.
However, the researchers emphasized that their findings did not prove that block reward miners physically moved from the EU to Russia because of the EU ETS, merely that they were consistent with so-called “emissions leakage”—when strict climate policies or carbon prices in one region cause companies to move their pollution or production to other regions with weaker rules—rather than evidence of it.
Nevertheless, the study’s wider implications showed that carbon pricing may reduce emissions in one region without reducing global emissions by the same amount if electricity-intensive activities move elsewhere.
As noted by the study: “Carbon pricing is jurisdictional, while proof-of-work cryptocurrency mining is a highly mobile electricity load.”
In other words, carbon policy such as the EU ETS—while well-meaning—may simply shift the problem rather than eliminate it, with the only noticeable effect being a competitive disadvantage for the climate-conscious jurisdiction as emission-intensive industries such as block reward mining move to countries offering cheaper electricity and weaker constraints.
While the EU wrestles with the implications of these findings, across the channel, U.K. lawmakers are attempting to get to grips with a different challenge facing the country’s digital asset sector, which some suggest is being forced out by local banks rather than carbon policy.
UK banks against BTC
On August 21, advocacy group Bitcoin Policy UK published a blog post criticizing the U.K. banking sector for restrictions on lawful BTC-related banking activity, and announcing it had submitted evidence to this effect to the Crypto and Digital Assets All Party Parliamentary Group’s (APPG’s) inquiry into banking access.
APPGs are informal, cross-party groups formed by Members of Parliament and Members of the House of Lords in the U.K. who share a common interest. The Crypto & Digital Assets APPG, which is currently made up of 29 sitting UK lawmakers, was set up on December 29, 2021, to provide “an essential forum for parliamentarians, regulators, government, and industry to come together and discuss the key challenges and opportunities facing the UK’s crypto and digital assets sector.”In July, it launched a Parliamentary Inquiry into access to banking services for the U.K. crypto and digital assets sector, after hearing concerns from firms that they had struggled to open bank accounts or access payment and other banking services, as well as concerns that some local banks had introduced measures such as blocking payments to certain crypto firms and imposing transfer limits.
According to advocacy group Bitcoin Policy UK: “Despite the UK moving towards a full regulatory framework, restrictions on lawful Bitcoin related banking activity appear to be getting worse across a number of major UK banks.”
The group cited a joint survey by Startup Coalition, the UK Cryptoasset Business Council, and Global Digital Finance published in January 2025, which found that half of U.K. fintech and crypto firms surveyed had been rejected when opening a bank account, or had an account subsequently closed, and only 14% had successfully opened and retained an account with one of the U.K.’s nine largest banks.
Bitcoin Policy UK also pointed to a more recent survey of ten major U.K.-facing exchanges, published by the UK Cryptoasset Business Council in January of this year, which showed that this apparently harsh treatment has not abated over the last year. Specifically, it found that roughly 40% of bank-to-exchange transfers were blocked or delayed, and 70% of respondents described the overall U.K. banking environment for digital asset businesses as becoming more hostile.
“The debanking of the UK’s digital asset economy is a major obstacle to its growth. And the issue is widespread: almost all of the major UK banks and payments services firms currently impose blanket transaction limits or complete blocks to cryptoasset exchanges,” read the report.
This debanking by the country’s banking sector is despite the fact that 12% of U.K. adults now own some form of digital asset, according to recent research from the Financial Conduct Authority (FCA) on consumer attitudes and behaviors toward crypto.
According to Bitcoin Policy UK, this disconnect is occurring because U.K. banking policy treats ‘crypto’ as a single category, “so Bitcoin gets caught by rules designed for very different products, such as unbacked tokens or issuer dependent stablecoins.”
The FCA, the regulator tasked with overseeing the digital asset sector, published its final rules and guidance for cryptoasset firms in June, including a licensing regime due to come into force in 2027 and specific rules for stablecoins.
The regulator has described its approach as being based on a ‘same risk, same regulatory outcome’ principle, which Bitcoin Policy UK argued “makes sense, but only where the risks are actually the same.”
“The evidence gathered for this submission suggests banking practice has not caught up with that position,” said the group. “In some areas, the gap appears to be widening even as the UK moves towards full implementation of its cryptoasset regulatory regime in 2027.”
In terms of what the advocacy group is calling for in its submission to the inquiry, it set out four recommendations: a clear regulatory statement that Bitcoin specific activity through an FCA-registered exchange should not be subject to blanket restriction; a requirement for banks to give a specific, actionable reason when declining a payment or closing an account connected to lawful Bitcoin activity, with a defined route to appeal; confirmation from the government or the FCA that banks can rely on FCA registration as a basis for assessing risk; and a periodic, published measure of the scale of account and transaction restriction affecting the sector.
“This does not argue against proportionate protection from fraud or money laundering,” said Bitcoin Policy UK. “It argues for banks having a reliable, transparent basis to distinguish a regulated Bitcoin transaction from the kind of activity the current rules were actually designed to catch.”
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