EU Parliament Votes against Proposal to ban Proof-of-Work Mechanism

The European Union voted against a proposal to ban cryptocurrencies and blockchain technology, in an effort to protect Europe’s status as one of the world’s leading innovation hubs. The vote is seen by some experts as a setback for cryptocurrency adoption.

A proposal that would have obliged cryptocurrencies like Bitcoin to switch to more environmentally friendly procedures was recently rejected by an EU parliament committee. 

After the Commission for Economic Policy (ECON) decided against a proof-of-work (PoW) ban on cryptocurrency mining, the Bitcoin and Ethereum mining communities in the European Union may breathe a sigh of relief. The council members voted 32 against the ban and 23 in support of it, with six committee members abstaining.

The committee voted against the proposed proof-of-work (POW) prohibition, according to Patrick Hansen, head of strategy at Unstoppable Finance. In a series of tweets on Monday, he explained:

“The ECON committee of the EU Parliament just voted against the de-facto POW-ban … Big relief & political success for the Bitcoin & crypto community in the EU.”

BREAKING NEWS: The EU Parliament’s ECON committee has just voted against the de facto POW ban, with 32 voting against and 24 voting in favor.

Big relief & political success for the bitcoin & crypto community in the EU💪💪

In this thread, I’ll provide a summary of the vote and what happens next. #Bitcoin

March 14, 2022 — Patrick Hansen (@paddi hansen)

Members have laid the road for crypto legislation that is focused on the future.

The measure, which was introduced to the draft last week, aimed to restrict the usage of cryptocurrencies powered by the energy-intensive proof-of-work computing method throughout the EU’s 27 member states. Crypto enthusiasts all across the globe reacted angrily to the suggestion. Stefan Berger, a member of the European Parliament and MiCA’s rapporteur, celebrated the victory on Twitter:

“First-stage win at #MiCA in committee! By accepting my proposal, Members have laid the road for crypto legislation that is focused on the future.. It is now a matter of accepting the report as a whole in the final vote & sending out a strong signal for innovation.”

Erster Etappensieg bei #MiCA im Ausschuss! Mit der Annahme meines Vorschlags haben die Mitglieder den Weg geebnet für eine zukunftsorientierte Krypto-Regulierung. Nun gilt es, den Bericht auch als Ganzes in Schlussabstimmung anzunehmen & starkes Signal für Innovation zu setzen.

@DrStefanBerger — Stefan Berger (@DrStefanBerger) 14th of March, 2022

The rule establishes a broad legal framework for asset management.

The effect of the outcome for the Proof-of-Work crypto mining mechanism is that while mining will most likely no longer be included in Markets in Crypto Assets (MiCA), the EU will add it to its sustainable finance taxonomy. The rule establishes a broad legal framework for asset management., markets, and service providers. All of these elements are currently not regulated at the EU level. As per the European Union, MiCA aims to: 

“As part of a European digital finance strategy, harmonize the European framework for the issue and trading of various forms of cryptocurrency tokens.” 

Joe Biden also wants to favorably regulate cryptocurrencies.

The European Commission’s MiCA branch, which stands for “Markets in Crypto Assets,” was founded in September 2020. In this digital age, the MiCA is in charge of creating and enforcing legislation linked to digital finance throughout Europe. MiCA aims to complement anti-money laundering (AML) legislation by enhancing financial security and investor protection in Europe.

There are talks that Joe Biden also wants to favorably regulate cryptocurrencies.. A recent article spoke about how he tried to push digital regulations relating to cryptocurrencies. On the other hand, the announcement did not have any details yet.“Although his intentions were different than a Swiss psychoanalyst’s, Joe Biden set off a similar exercise in the financial world this week when he issued a long-awaited executive order on digital assets that somehow managed to elicit a positive response in the cryptocurrency community.”