EU Votes On Crypto Regulation Without Banning Proof-of-Work
The European Union (EU) has voted on the regulatory framework for governing crypto assets.
The EU parliament’s Economic and Monetary Affairs Committee has voted 31-4 in favor of a new draft of the Markets in Crypto Assets (MiCA) framework.
The framework covers in broad terms the issuance and trading of cryptocurrencies, and promises to make it easier for crypto firms to expand throughout the EU’s 27 member states by facilitating a “passportable” license that would be valid between countries.
“Finally, the agreed text includes measures against market manipulation and to prevent money laundering, terrorist financing and other criminal activities.”
The committee has also voted to remove a provision that sought to limit the use of crypto that uses a consensus mechanism known as proof-of-work. The rule could have, if effective, banned the cryptocurrencies such as bitcoin (BTC) and Ethereum (ETH) across the European Union.
However, the committee ended up leaning in favor of an alternative provision that would require the European Commission (EC), EU’s legislative arm, to come up with a “a legislative proposal to include in the EU taxonomy (a classification system) for sustainable activities any crypto-asset mining activities that contribute substantially to climate change, by 1 January 2025.”
The provision’s aim is to reduce the carbon footprint of cryptocurrencies. Proof-of-work has come under criticism from regulators and politicians around the world over energy concerns. Some EU leaders have raised concerns that renewable energy may be channeled into sustaining cryptocurrencies like bitcoin instead of national use.
According to the statement, European parliament members stress that other industries also consume energy resources that are not climate-friendly. They call for the Commission to work on legislation addressing these issues across different sectors.”
As a next step, the MiCA draft will move on to further negotiations with EU governing bodies.
