The EU parliament committee just rejected a proposal that would have required cryptocurrencies like Bitcoin to shift to more environmentally friendly mechanisms.
The Bitcoin and Ethereum mining community in the European Union can breathe a sigh of relief after the Commission for Economic Policy (ECON) voted against a proof-of-Work (PoW) ban on cryptocurrency mining. The council members had 32 members voted against, and 23 voted in favor of the ban, while six committee members abstained.
According to Patrick Hansen, head of strategy at Unstoppable Finance, the committee has voted against the proposed proof-of-work (POW) ban. He explained in a series of tweets Monday:
“The ECON committee of the EU Parliament just voted against the de-facto POW-ban … Big relief & political success for the Bitcoin & crypto community in the EU.”
Members have paved the way for future-oriented crypto regulation
The provision, which was added to the draft last week, sought to limit the use of cryptocurrencies powered by an energy-intensive computing process known as proof-of-work across the EU’s 27 member states. The proposal met with a heavy backlash from crypto advocates worldwide. Stefan Berger, a member of the EU Parliament and rapporteur of MiCA, tweeted the success:
“First-stage win at #MiCA in committee! By accepting my proposal, members have paved the way for future-oriented crypto regulation. It is now a matter of accepting the report as a whole in the final vote & sending out a strong signal for innovation.”
The regulation proposes an overarching legal framework for assets
The effect of the outcome for the Proof-of-Work crypto mining mechanism is that while mining will most likely no longer be included in Markets in Crypto Assets (MiCA), the EU will add it to its sustainable finance taxonomy. The regulation proposes an overarching legal framework for assets, markets, and service providers. All of these elements are currently not regulated at the EU level. As per the European Union, MiCA aims to:
“Harmonize the European framework for the issuance and trading of different types of cryptocurrency tokens as part of a European digital financing strategy.”
Joe Biden also wants to regulate cryptocurrencies positively
MiCA, which stands for “Markets in Crypto Assets,” is a branch of the European Commission established in September 2020. The MiCA is responsible for developing and implementing regulations related to Digital Finance across Europe in this digital era. MiCA seeks to go hand-in-hand with Anti-Money Laundering (AML) laws and strengthens financial safety and investors’ protection in Europe.
There are talks that Joe Biden also wants to regulate cryptocurrencies positively. A recent article spoke about how he tried to push digital regulations relating to cryptocurrencies. On the other hand, the announcement did not have any details yet.“Although his intentions were different than a Swiss psychoanalyst’s, Joe Biden set off a similar exercise in the financial world this week when he issued a long-awaited executive order on digital assets that somehow managed to elicit a positive response in the cryptocurrency community.”