The European Union (EU) voted against a proposed package of crypto regulation that would have banned “de facto” mining.
The EU Parliament’s Committee on Legal Affairs and the Internal Market has been working on a new draft proposal for crypto regulations, but today it was announced that all mentions of banning proof-of-work mining had been removed from the bill in order to make room for more discussion about this issue within Europe.
A key piece of legislation aimed at coordinating the EU’s approach to crypto, the Markets in Crypto Assets Regulation (MiCA) has occupied much of the day’s work of the European Parliament’s Economic and Monetary Affairs Committee (ECON).
This afternoon, ECON rejected versions of the legislative package that included what has been described as a “de facto” ban on proof-of-work cryptocurrency mining using cryptocurrencies like Bitcoin and Ethereum.
“The ban of unsustainable protocols was watered down in two different compromises. Unnamed advisors involved in the negotiations told Decrypt on the phone that compromises containing this de facto ban of unsustainable mechanisms were rejected.
In reference to the widespread opposition from the crypto-industry to any potential ban on proof-of-work blockchains, the advisor said, “the proposal that sparked all that activity won’t be in the MiCA.”
Six individuals abstained from voting in favor of rejecting such a mining ban. The vote was 32 to 23.
EU Cryptocurrency Regulatory Framework
For some time now, the EU’s proposed cryptocurrency regulatory framework has generated controversy.
To mine, exchange, or use proof-of-work blockchains within the European Union, mining, exchange, or use must meet minimum environmental sustainability standards.
Nonetheless, some lawmakers did not like the wording, leading to the delay of the vote on February 28, amid fears that the package may have been “misinterpreted as a de facto Bitcoin ban,” according to the chairman of the European Parliament’s Economics Committee, Stefan Berger.
A watered-down version of the original text, submitted by the European Green Party and seen by Decrypt, was rejected by EU parliamentarians today.
“Crypto assets shall be subject to minimum environmental sustainability standards in terms of the consensus mechanisms used to validate transactions, before they can be issued, offered or admitted to trading in the Union,” the revised proposal stated.
Can Bitcoin Mining Be GREEN?
Bitcoin, Ethereum, and other cryptocurrencies use proof-of-work crypto mining, which has long attracted the scrutiny of environmentalists.
According to Cambridge University, Bitcoin consumes more electricity than most countries in the world. This can result in a large carbon footprint, depending on the energy source used.
The greenhouse gas emissions associated with Bitcoin mining have been estimated by previous research conducted by Decrypt to be roughly equivalent to those associated with coal burning.
“We believe it’s not a good thing. “We hoped that our proposed legislation would at least open the debate and our discussion on some measures that could address crypto assets’ environmental impact,” the advisor told Decrypt today.
According to Alex de Vries, founder of Digiconomist, today’s vote is not likely to be the last time authorities will contemplate how to deal with this issue. The reality is that the Bitcoin industry has no plans to do anything about it. So these numbers aren’t going to get better by themselves.”
As of Now, It Doesn’t Look Like MiCA Will Pass ECON. What Happens Next?
As of now, only the language of the legislation package itself has been approved by ECON; it has not yet been decided whether or not MiCA should be approved.
MiCA will have to be approved by the EU Commission, as well as by the European Council, even if it passes ECON.
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Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
