The Cardano Foundation, in partnership with the Crypto Carbon Ratings Institute (CCRI), has unveiled a sustainability report aimed at aligning with the forthcoming Markets in Crypto-Assets (MiCA) regulation in the European Union. Published on July 2, the report provides essential sustainability indicators that crypto asset issuers and service providers will be required to disclose under MiCA.
What Does the Report Reveal?
According to the Cardano Foundation, the collaboration with CCRI ensures robust monitoring and data collection methodologies for the blockchain. The report emphasizes Cardano’s commitment to developing a more energy-efficient consensus protocol that consumes significantly less electricity compared to traditional proof of work models.
The document details Cardano’s total annual electricity consumption, carbon footprint, and the marginal power demand per transaction per second. It also aligns its sustainability metrics with the European Securities and Markets Authority’s draft regulatory technical standards, ensuring thorough compliance.
Why Is This Important for the Industry?
Frederik Gregaard, CEO of the Cardano Foundation, highlighted that creating MiCA-compliant sustainability indicators aims to meet upcoming EU regulations and serve as a benchmark for the crypto industry. Gregaard mentioned that the MiCA regulations, which partially came into effect this week, mark the beginning of a six-month countdown for implementing significant ESG binding requirements.
He added that as the crypto market matures and fully adopts MiCA regulations, these efforts will be instrumental in fostering trust among regulators, investors, and users, promoting the sustainable advancement of blockchain technology.
Key Takeaways
- Cardano’s partnership with CCRI ensures high-quality blockchain monitoring and data collection.
- The report highlights significant energy efficiency improvements over proof of work protocols.
- Key sustainability metrics are aligned with European regulatory standards.
- Compliance with MiCA regulations is crucial for gaining trust and broader industry adoption.
Gregaard emphasized that this initiative showcases how blockchain networks can effectively address environmental, social, and governance (ESG) concerns while maintaining transparency and efficiency. The first phase of MiCA regulations, focusing on stablecoin projects, took effect on June 30, with additional regulations impacting crypto asset service providers, including Cardano, set to be introduced in December.