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Following news that Norway plans to remove electricity subsidies for businesses using data centers to mine cryptocurrency, Sweden plans to fill the gap. Norway plans to remove the subsidies in January 2019, meaning cryptocurrency mining will become very expensive in Norway due to the tax hike involved in the process. Norway cites environment concerns for their decision, but technology experts say the decision will drive innovative crypto business away from Norway and into neighboring countries.
It looks like those experts were right on the money. Cryptocurrency companies in Norway have started looking to Sweden to provide their mining needs. Bitmain, the world’s largest Bitcoin investor, had projects in the running in Norway, but this changes things. In a statement Bitmain boss for Norway, Julie Hvideberg said: “We have already talked with our Norwegian partners who are recovering from us, saying that we must stop the project. We are a global company and can move to Sweden or Denmark, but our Norwegian partner loses a big contract.”
By removing the subsidies, Norway stands to gain back around 10 million Krone (USD 1,162,635). Another reason for the change is that Norway believed the cryptocurrency mining taking place in the country wasn’t creating enough jobs to justify the tax break.
Although this is bad news for crypto businesses in Norway, it’s good news for Sweden and Denmark. Sweden is probably set to gain most of the Norweigan business since they have a huge landmass that can afford large data centers to be created, whereas Denmark is much smaller.
Crytpo mining companies in Norway are still in the process of talking to politicians about the decision. For many people, the news came as a surprise, without a long process of talks with industry experts. These experts are now standing up for themselves and fighting the issue. It is too soon to tell whether these talks with politicians will cause any changes to the the decision.
Many people have argued that the Norwegian Government’s decision came from not understanding the cryptocurrency industry. It’s likely that the government don’t see there is long-term potential to cryptocurrency and as a result, so considering the short-term environmental and financial consequences of it. Talks with the experts in Norway may change their outlook on the issue, and at the very least, the proposal may be put on hold pending more discussion into the consequences of the proposal.