European Union lawmakers have removed a controversial paragraph that would have made all proof-of-work (PoW) based cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) illegal.
Proposed Ban on PoW-Based Coins Deleted
The Markets in Crypto-Assets (MiCA) framework, headed by Economic and Monetary Affairs (ECON) rapporteur – Stefan Berger – was originally scheduled for February 28. However, due to the vehement opposition over the language on the passage, fearing that it would be misinterpreted as a de facto Bitcoin ban, the vote was delayed last week.
According to the new report by a German news outlet, paragraph 61 (9c) has been scrapped. The vote for the much-anticipated market regulatory act targeting the crypto industry is yet to be rescheduled. Further clarifying the development, Berger tweeted,
“The paragraph is no longer in the text. The report has yet to be voted on in committee. In this vote, we will see where the majorities lie. The decision has not yet been made #MiCA.”
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.
It also mandated that all assets would have to meet minimum environmental sustainability standards. If the latest version of the draft passes the required number of votes, it will then face trilogue debates, including the European Commission and Council, in addition to the Parliament.
Europe’s Environment Concerns
Despite the latest move, global cryptocurrency regulations continue to wrestle with the growing concerns surrounding the environmental impact of PoW-based assets.
It’s a similar story for Europe as well. 2021 witnessed debates and discussions around crypto mining like never before. To that extent, several industry players have come forward in support of less energy extensive PoS networks while others have stayed away from adopting Bitcoin and other PoW blockchain-based crypto-assets.
Last year, Sweden’s financial services regulator, Finansinspektionen (FI), stated that cryptocurrency assets are a threat to the climate transition, and energy-intensive mining should be banned. The regulator also noted that Sweden requires renewable energy as cryptocurrency mining threatens its ability to meet the Paris Agreement.
More recently, Erik Thedéen, vice-chair of the European Securities and Markets Authority (ESMA), also called for a prohibition on PoW crypto mining based on the industry’s high energy demands.