Europe’s Proposed Crypto Regulation Removes Proof-of-Work Ban

A text that threatened to ban cryptocurrencies that rely on the energy-hungry proof-of-work (PoW) mining method has been removed from the draft legislation that was drawn up for regulating the crypto space in Europe. This move comes after there had been objections from the crypto community regarding that specific part of the legislation. The wording could have banned all cryptocurrencies that use this mining method, which would include the pioneer Bitcoin. However, the latest version of the Markets in Crypto Assets (MiCA) framework appears to be missing from the EU’s legislation draft.

A vote had been scheduled in the European Parliament (EP) for approving the legislation at the end of February, but it had been postponed in order to address the wordings that had resulted in the ire of the crypto community. According to BTC Echo, it appears that they have taken the Bitcoin ban off the table. The German crypto news outlet further said that the EU seems to have dropped the controversial paragraph altogether. The text had been proposed by the factions of Social Democrats, Greens and the Left. Had the legislation been approved, it would have prevented companies from offering any services involving the custody, acquisition and trading of assets that are based on the PoW method.

The rapporteur of the draft legislation, Stefan Berger had requested the cancellation of the vote that was scheduled. He confirmed the report from BTC Echo via a tweet on late Tuesday. He also disclosed that they had resumed negotiations once more. Berger said that their goal was to get the MiCA framework through the Parliament as quickly as they can. His statement reflects the sentiments of Christine Lagarde, the President of the European Central Bank (ECB). Last week, she had urged the European Union to adopt the regulation swiftly in order to prevent Russia from evading sanctions that have been imposed due to its invasion of Ukraine via the use of crypto.

A member of the Committee on Economic and Monetary Affairs, Berger disclosed that they were having talks about the legislation once more. As soon as the European Parliament passes the regulatory package, there will be a dialogue between the EU member states, the European Commission and the European Parliament, which will decide the outcome. Then, the future implementation of the draft approved would be evaluated by the executive body in Brussels. In the last couple of months, a number of regulators and officials from various EU member states have spoken against proof-of-work mining.

They have called for an EU-wide ban on the activity, citing its power-hungry nature. One of the first countries that insisted on such a measure was Sweden. It said that there was an increased use of renewable energy for bitcoin mining and this was at the expense of the climate neutrality goals associated with other industries. Other countries are also concerned about the effects of crypto mining, such as Kazakhstan that has experienced shortage of electricity,on the environment and Bitcoin has received a lot of criticism for its carbon-heavy footprint.

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