EU Parliament Proposes Banning Proof-of-Work Crypto Under MiCA Framework, Will it Ban Bitcoin?
The European Union parliamentarians are looking to bring a complete ban on the use of the proof-of-work cryptocurrencies through a vote on a draft of the proposed Markets in Crypto Assets (MiCA) framework.
This might effectively lead to the banning of Bitcoin and other PoW cryptocurrencies. The draft for MiCA framework also contains a late addition that looks to limit the use of digital assets powered by Proof-of-Work (PoW), an energy intensive crypto mining process.
Although the vote is assumed to be close, a small majority of lawmakers might vote against the measure, as per people familiar with the matter. The provision in measure requires all digital assets to be subject to EU’s “minimum environmental sustainability standards with respect to their consensus mechanism used for validating transactions, before being issued, offered or admitted to trading in the Union.”
Some of the top cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) work on the PoW consensus mechanism. Ethereum (ETH), however, is in the process of transition to the Proof-of-Stake (PoS) mechanism.
Jereme Alliare, founder of Circle Pay said: “Extremely high stakes vote in the EU. That such a proposal made it this far is extraordinarily concerning and unlikely to stand up to practical reality”.
The PoW cryptocurrencies have been on lawmakers’ radar in the EU over growing energy concerns. However, some of the top cryptocurrencies like Bitcoin have already moved a large part of its mining over green energy instead of coal energy. A large part of this transition happened last year after China announcing a blanket ban on the crypto mining activities in the country.
Stefan Berger, the EU parliamentarian charged with overseeing the content and progress of the MiCA framework is working to reach a compromise in this matter. Speaking to CoinDesk, Berger said: “The Greens and Socialists, as you can imagine, are criticizing the proof-of-work concept and criticizing the energy use, saying that bitcoin needs more energy than the Netherlands”.
Furthermore, he said that MiCA shouldn’t be used for settling energy-related issues. The goal of the framework is to rather regulate the use of digital asset.
The latest news comes as the United Kingdom has also introduced a ban on all Bitcoin ATMs operating in the country. This seems yet another crackdown on digital assets by the regulators.