Earlier on Monday, members of the European Parliament’s Committee on Economic and Monetary Affairs voted against a version of the Markets in Crypto Assets, or MiCA, invoice that may want to have effectively banned proof-of-work-based cryptocurrencies inside the EU. This comes as a massive relief for the crypto industry, whose representatives had before warned about the threat of a hardline regulatory scenario.
MiCA is a regulatory framework that includes 126 articles as well as a precise layout of their implementation via the EU’s and member states’ institutions. The draft used to be brought via the European Commission back in 2020 as a part of its Digital Finance strategy.
MiCA covers a wide vary of crypto-related subjects, such as the fame of all main currencies and stablecoins, the operations of mining and alternate structures — with some wonderful exclusions such as digital currencies issued through central banks, or CBDCs — protection tokens, nonfungible tokens, or NFTs and decentralised finance, or DeFi.
The foremost intrigue of Monday’s parliamentary session lay in the enormous variations between two versions of the draft that were up for a vote. One of them contained language that should outlaw any operations with the cryptocurrencies that matter on the proof-of-work, or PoW, protocol. The not easy line would require currency vendors to post a unique plan of their compliance with environmental sustainability standards.
In the case of Bitcoin (BTC) and some other decentralised systems, such small print couldn’t be provided in principle, as there’s no current central operator or an character or collective decision-maker.
That is why this version of the draft was in the past corrected to get rid of such a regulatory deadlock. As the European Parliament Committee on Economics and Monetary Affairs member Stefan Berger assured earlier, the troublesome language used to be no longer supposed to emerge in the remaining draft.
Ultimately, the hardline version of MiCa did show up on the ground but used to be not supported by way of the majority of the MEPs. As Patrick Hansen, head of method at crypto association Unstoppable Finance reported, 32 individuals of the ECON committee voted against the restrictive version and solely 24 cast their votes in favour. The latter minority consisted mostly of the members of the Green fraction and the Progressive Alliance of Socialists and Democrats.
The more reasonable model of MiCA, which will now continue its ride through the EU institutions, doesn’t contain any direct or implicated ban on PoW mining. Instead, it directs the European Commission, the EU’s chief executive body, to present a legislative notion “with a view to which includes in the EU sustainable finance taxonomy any crypto-asset mining activities” via Jan. 1, 2025.
Crypto mining could nevertheless be categorised as an “unsustainable” recreation before January 2025, consequently getting barred from the aid and investment of European companies and governments. However, this is still quite a ways from an outright ban, the enactment of which should have dramatically altered the country of crypto in Europe.
Next up for the MiCa is a three-way consideration via the European Parliament, the European Commission and the Council of the European Union.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.