- The proposal, under the Markets in Crypto-assets (MiCA) regulation, had drawn widespread criticism from across the crypto industry.
- According to observers, the regulation would have seen a ‘de-facto ban’ on proof-of-work (PoW) cryptocurrencies.
The European Parliament has voted against a draft regulation that sought to ban Proof-of-Work (PoW) cryptocurrencies in the EU over concerns about carbon footprint from mining. Bitcoin (BTC) and Ethereum (ETH) are the two largest cryptocurrencies currently using mining for network consensus.
Crypto proponents say the argument misses the point, especially with Bitcoin increasingly adopting renewable energy sources. Even, the carbon footprint from BTC mining across the EU is negligible compared to other sectors.
EU Parliament makes the right call and votes against proof-of-work ban. The positive implications of Bitcoin can't be overestimated. Plus, let's get priorities straight, Bitcoin's carbon footprint to merit ratio is so much stronger than other energy uses in the EU.
— Cameron Winklevoss (@cameron) March 14, 2022
The vote, taken by the EU Parliament’s Committee on Economic and Monetary Affairs (ECON) on Monday afternoon came in 32 to 24 against the proposal. The committee instead adopted a draft regulation that has added Bitcoin to the EU’s sustainable finance taxonomy.
Big relief for the Bitcoin community
Patrick Hansen, the Head of Strategy and Business Development at DeFi platform Unstoppable Finance, called this a “big relief and political success for the bitcoin and crypto community in the EU.”
“MiCA regulates financial instruments and financial service providers. It makes way more sense to address any concerns around the sustainability of mining technology separately,” Hansen said.
According to Hansen, the MiCA draft is set to go through a “trilogues” negotiation phase likely to last two months or so. This will see the EU Commission, Parliament and Council all consider the regulation.
The bill then becomes the law, with companies having up to six months to comply.
But is that it with Bitcoin and PoW ban in the EU? That’s unlikely it, according to the strategist.
“The groups that lost the vote have one last option. They could veto a fast-track procedure of MiCA through the trilogues & bring the discussion to the plenary of the Parliament. They need 1/10 of the votes of the EP to do so, which they have,” he noted.
But while this move might not still change the vote, it doesn’t mean that PoW cannot be discussed outside of MiCA regulation.
8/ And even outside of this MiCA regulation, the discussion around POW-regulation is far from over.
It will come back in the context of the sustainability taxonomy or in the upcoming data center regulation: https://t.co/izyWzGrnUS
— Patrick Hansen (@paddi_hansen) March 14, 2022
Bitcoin currently trades around $38,800, largely unchanged in the past 24 hours.