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Its time for banks and asset managers to start pushing Bitcoin to clean up its pollution, Greenpeace argues in a new report. The environmental organization wants to see Bitcoin change its code to slash energy consumption and greenhouse gas emissions. Thats a big ask, but Greenpeace argues that financial institutions could have an outsize influence on the Bitcoin network through its business dealings.

The report focused on nine major financial institutions that are providing the glue that keeps the Bitcoin ecosystem together, says Joshua Archer, who leads Greenpeace USAs Bitcoin campaign. Financial institutions have an important responsibility, but theyre currently ignoring the severity of the problem.

The report focused on nine major financial institutions that are providing the glue that keeps the Bitcoin ecosystem together

Those financial institutions including BlackRock, Vanguard, JPMorgan Chase, and others controlled shares in Bitcoin mining companies that were valued at more than $1.35 billion in April 2023, according to Greenpeaces report. Many of the financial companies are also expanding their services to make it easier for customers to deal in Bitcoin. That could increase the cryptocurrencys already hefty environmental footprint, the report says. Crypto companies are facing a storm of scrutiny from regulators after FTXs spectacular collapse. Democrats are also pressing companies on Bitcoins impact on power grids and climate goals. Despite those headwinds, Bitcoins emissions can still rise every time its price rallies.

Bitcoin is by far the most polluting cryptocurrency. Thats not just because its the biggest by market cap but because of the way the blockchain validates transactions. Bitcoin miners run data centers full of specialized machines that solve complex puzzles around the clock. They earn new Bitcoin this way, but all that puzzle-solving comes with energy and environmental costs. The cryptocurrency uses about as much electricity annually as the country of Sweden.

Theres been resistance to do the same thing with Bitcoin, though. Miners have already invested in their equipment and would be hard-pressed to throw it all away, for one. And to make the switch, every node on the network would need to be on board. Thats a tough sell for folks who might have bought into Bitcoin in the first place because its supposed to be decentralized theoretically free from any single institution telling them what to do.

Greenpeace makes the case that financial institutions actually do hold sway. BlackRock is a leader in the pack when it comes to asset managers support for Bitcoin, according to the Greenpeace report. Its shareholdings in 18 Bitcoin mining companies were valued at more than $595 million in April. The report also draw[s] a direct line from BlackRocks Bitcoin mining investments to the revival of fossil fuel infrastructure. For example, BlackRock is the biggest institutional shareholder in Greenidge Generation Holdings, a company that uses a previously shuttered gas power plant almost exclusively to mine Bitcoin.

Among banks, JPMorgan Chase & Co. was the leading Bitcoin supporter, according to the Greenpeace report. It controlled shares in 17 Bitcoin mining companies valued at more than $26 million in April and offers different products and services to help customers invest in Bitcoin. That contradicts the banks goal of helping the world reaching net zero greenhouse gas emissions by 2050, the Greenpeace report says. And Chase hasnt been transparent about whether it includes emissions from Bitcoin in its carbon accounting a problem for the financial sector overall, Archer says.

JPMorgan Chase didnt immediately respond to a request for comment from The Verge, and BlackRock declined to give comments on the record.

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Can banks push Bitcoin to clean up its act? - The Verge