EU Lawmakers Rethink Banning Bitcoin And Other PoW-based Assets

The lawmakers of the European Union have deleted a controversial section of the pending bill that called for a ban on Bitcoin and other crypto-assets that rely on the PoW blockchain-based algorithm. The bill, if passed, could have made it illegal for crypto services to deal in coins based on proof-of-work—the consensus mechanism Bitcoin and Ethereum use to “mine” new currency and secure their networks.

According to Decrypt, The Markets in Crypto Assets (MiCA) bill, put to the European Parliament by a coalition spearheaded by Stefan Berger (who heads Economic and Monetary Affairs (ECON) rapporteur), was set for a vote on Monday, February 28. However, it was delayed late last week after many in parliament vehemently objected to a paragraph regarding proof of work.

Now, Berger confirmed that paragraph 61 (9c) has been removed altogether, even though the vote for this long-awaited bill is yet to be rescheduled. The passage in question argued that no cryptocurrencies could be created, sold, or traded within the European Union region if they utilize “environmentally unsustainable consensus mechanisms.” This also mandated that all crypto assets have to meet minimum environmental sustainability standards.

For meeting the “minimum environmental sustainability standards” part, many argued that it would equate to a de facto ban on Bitcoin and Ethereum mining in Europe, while also making it untenable for custodians to hold proof-of-work coins for clients. Nonetheless, Berger clarifies that this wasn’t lawmakers’ intent. In announcing the delayed vote last Friday, he further added that “individual passages of the draft report can be misinterpreted & understood as a POW ban.”

The passage in question argued that no cryptocurrencies could be created, sold, or traded within the European Union region that does not follow environmentally sustainable consensus mechanisms.

Stefan Berger

MiCA bill certainly possesses the capability of reshaping the cryptos industry in Europe. Originally proposed in September 2020, it would require the European Central Bank to “establish uniform rules for crypto-asset service providers and issuers at EU level,” Decrypt reports. In short, the bill would serve as a regulatory framework for cryptocurrencies across the European Union -something the U.S. and other nations are still struggling to curate.

Regardless of whether the ‘ban’ on bitcoin is passed, we should keep in mind that environmental concerns are a major issue for Europe today, whose countries still struggle to meet the climate standards agreed to in the Paris Agreement.

Sneh Dokania is an Economics major student with an inquisitive disposition seeking to articulate facts, information and news stories in a candid manner on Clout News.

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