The ECON committee of the European Union voted towards a de-facto ban on cryptocurrencies that depend on the proof of labor consensus protocol, like Bitcoin, that was included within the newest draft of the MiCA, or Markets in Crypto-assets Regulation, report.
Erster Etappensieg bei #MiCA im Ausschuss! Mit der Annahme meines Vorschlags haben die Mitglieder den Weg geebnet für eine zukunftsorientierte Krypto-Regulierung. Nun gilt es, den Bericht auch als Ganzes in Schlussabstimmung anzunehmen & starkes Sign für Innovation zu setzen.
— Stefan Berger (@DrStefanBerger) March 14, 2022
A majority of 32 parliamentarians voted towards the ban and selected to help an alternate modification — to convey cryptoassets underneath sustainability-related taxonomy like different monetary merchandise — submitted by MEP Stefan Berger, who’s serving because the Rapporteur on the report. The modification basically removes the judgment and addressing of POW from the MiCa regulation.
In the meantime, 24 parliamentarians voted in favor of the ban, underneath which the EU may basically block exchanges from itemizing, in addition to corporations from offering providers in, cryptocurrencies that don’t meet its “environmental sustainability standards.”
Why is such a ban included?
Proof of work-based cryptocurrencies requires mining to validate transactions on the chain. Mining is actually a fancy drawback that may solely be solved utilizing an enormous quantity of computing energy, which in flip wants large quantities of real-world vitality to operate. In Bitcoin’s case, these issues get tougher and tougher to unravel over time and require extra energy, particularly with greater ranges of adoption.
Some parliamentarians consider that is negatively affecting the bloc’s progress towards assembly its local weather objectives. Bitcoin mining’s world carbon emissions have been rising at a gradual fee since its inception and at the moment are equal to these of the Czech Republic, with a worldwide carbon footprint of 0.19%.
Subsequent Steps
The ECON committee’s vote on the report is barely step one towards formally implementing crypto-related regulation.
“The EU Parliament has paved the best way for innovation-friendly crypto regulation that may set requirements worldwide. The method isn’t over but; Steps nonetheless lie forward of us.”
Berger stated in a tweet after voting was concluded. He elaborated that the committee’s approval of the ultimate draft means it might now proceed to interinstitutional negotiations, which contain a “trilogue” between the Parliament, the European Council, and the European Fee.
Regulation can solely come into power if it efficiently passes by the trilogue. Moreover, MEPs who’re in favor of the ban nonetheless have an choice to veto the report and convey it again to the plenary of the Parliament.
6/ Any possibilities left for the POW-ban?
The teams that misplaced the vote have one final choice. They may veto a fast-track process of MiCA by the trilogues & convey the dialogue to the plenary of the Parliament. They want 1/10 of the votes of the EP to take action, which they’ve.
— Patrick Hansen (@paddi_hansen) March 14, 2022
If the report is taken again to the plenary it should possible trigger extra delays in regulating the European crypto trade. Moreover, even when the report passes by to the trilogue stage it’s nonetheless unsure how the union will in the end regulate mining and proof of labor.
