Iceland’s Financial Supervisory Authority (FME) has announced the first registration of a cryptocurrency exchange in the country, allowing users to trade Bitcoin.
The exchange Skiptimynt, will feature two trading pairs, the Icelandic Krona (ISK)/Aurora Coin(AUR) and Bitcoin (BTC)/ISK. Aurora coin is Iceland’s alternative to Bitcoin created in 2014.
In reality, Skiptimynt isn’t the country’s first exchange as that distinction rests with ISX launched in 2016. However, that exchange is largely inactive and doesn’t offer a Bitcoin trading pair, limited to the ISK/AUR pairing.
When Auroracoin was launched it caught the eye of the country including politicians, the cryptocurrency community and the media. Although, very few Icelandic shops and services accepted payments in AUR and since then it has been largely ignored.
After its failed attempts to “break the shackles of the fiat currency financial system in Iceland”, the country has primarily become a center for cryptocurrency mining. This is largely due to its combination of abundant renewable energy sources and cold climate – both suited for mining operations as they result in low electricity tariffs and cooling costs. Lower costs generate higher profits for cryptocurrency miners, which has created a situation in Iceland where electricity consumption for mining has overtaken household use.
Prominent politicians in Iceland have suggested that the country’s economy could be at risk given a cryptocurrency market crash. Government finance minister Bjarni Benediktsson said that the crypto threat “cannot be excluded as a risk factor” to an economy still recovering from the global financial crisis.
Styrmir Hafliðason, security and quality manager at Skiptimynt data center, is responsible for dealing with the weekly flood of mining applications. He disagrees, suggesting, for example, a crackdown on crypto by regulators wouldn’t impact the country, as crypto assets are simply held as zeros and ones in private centers, and therefore aren’t part of Iceland’s economy.
A recent report by KPMG claims that about 90 percent of the power consumption of Iceland’s data centers last year was dedicated to crypto mining.
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