- European Union lawmakers dropped a section of a pending bill.
- Named Markets in Crypto Assets (MiCA) bill, the proposal will provide a regulatory framework.
- Berger confirmed that paragraph 61 of the bill has been removed altogether.
European Union (EU) lawmakers dumped a piece of a pending bill called MiCA (Market in Crypto Assets). One section of the bill, proposed by a committee led by MP Stefan Berger, made it illegal for crypto services to deal in coins based on Proof-of-Work (PoW). To clarify, the PoW consensus mechanism is used by Bitcoin and Ethereum to mine new coins and secure their network.
In addition, the proposal sent to the European senate was set for a vote on February 28. However, it was postponed after many in the parliament objected to a section regarding PoW. In fact, Berger confirmed that paragraph 61 of the bill has been removed altogether, though the vote has yet to be rescheduled.
MiCA has the potential to transform crypto adoption in Europe. Originally submitted in September 2020, the European Central Bank is required to set uniform rules for crypto-asset service providers and issuers at the EU level. In other words, it is the forming of a regulatory framework for crypto across the EU. This is a concept that the US and other countries are still striving to create.
Berger claimed that the lawmakers were misunderstood. In announcing the delayed vote last Friday, he said:
Individual passages of the draft report can be misinterpreted & understood as a PoW ban.
To avoid the ban, crypto assets would have to meet minimum environmental sustainability standards. However, one section specifically got crypto users’ attention – that by 2025, it mandates no crypto-asset could be created or traded within the EU if they used environmentally unsustainable consensus mechanisms.
Rivals of the bill also discussed that it would correlate to a de facto ban on Bitcoin and Ethereum mining in Europe. In addition, this will make it untenable for custodians to hold PoW coins for clients.
