Europe Rejects Proposal To Ban PoW Blockchains Like Bitcoin And Ethereum

March 14, 2022 3:35 pm Comments

In recent news, the European Union has recently decided to ban a proposal which called to ban proof-of-work blockchains like Bitcoin and Ethereum.

The parliament had voted on the decision for this proposed framework this week and many were surprised that the proposal was able to even make it this far.

It seems that the move to limit crypto was added in last minute due to concerns about the effect that these blockchains would have on the energy industry and the environment, but immediately faced criticism from the broader crypto community.

As a result, the rejection of the proposal was confirmed as many had believed that an outright ban would be unreasonable and quite impossible to enforce in reality.

Euronews reports:

CoinDesk reported on Sunday that the provision in the EU bill would require all crypto assets to be subject to the bloc’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.”

The draft proposal received backlash from the cryptocurrency community.

“Individuals and organisations should be free to choose the technology most appropriate to their needs,” a statement from the crypto wallet provide Ledger read.

Policymakers should neither impose nor discriminate in favour of a particular technology. This is deeply concerning and would have serious consequences for Europe.

Many members of parliament and supporters of MiCA see this as a first step for the European Union to set up a regulatory foundation that will allow the region to embrace crypto and blockchain.

Stefan Burger, a member of parliament, shared that this was considered a new win for MiCA which should encourage pro-crypto bills in the future.

Burger expects the requirements in regulation set here by the parliament will ultimately set a precedent for the rest of the world.

Regarding concerns for proof-of-work blockchain effects on energy and the environment, the committee plans to reconvene to align on a sustainable finance taxonomy to regulate crypto mining activities.

CoinDesk reports:

“5. By 1 January 2025, the Commission shall present to the European Parliament and to the Council, as appropriate, a legislative proposal to amend Regulation (EU) 2020/852, in accordance with Article 10 of that Regulation, with a view to including in the EU sustainable finance taxonomy any crypto asset mining activities that contribute substantially to climate change mitigation and adaptation.”

Proof-of-work has come under heavy criticism from some regulators and politicians around the world over energy concerns. Some EU leaders are concerned that renewable energy may be channeled into sustaining cryptocurrencies like bitcoin instead of national use.

After the parliament vote, the MiCA draft will move on to a “trilogue,” a formal round of negotiations between the European Commission, Council and Parliament.

From this recent news, it looks like the regulatory frameworks for crypto are in the initial phases of taking shape and will likely continue on other regions.

The news coincides with President Biden’s recent executive order concerning digital assets and their place in the economy.

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