European Parliament Votes Down The PoW Ban - A Great Comfort For The Crypto Sector.

2022-03-15 | Selina Mathew

European Parliament Votes Down The PoW Ban - A Great Comfort For The Crypto Sector.

Delegates of the European Parliament's Council on Economic and Monetary Affairs decided previously on Monday against a variant of the Markets in Cryptocurrency Assets, or MiCA, bill, which could have essentially prohibited proof-of-work-based cryptos within the EU. This is a great comfort for the cryptocurrency business, whose leaders have earlier cautioned of the prospect of a tough regulatory environment.

MiCA is a regulatory system that has 126 articles and a comprehensive strategy for its execution by the authorities of the EU and constituent nations. The European Commission released the proposal in 2020 as a component of its Digital Finance plan.

MiCA encompasses a broad spectrum of cryptocurrency-related topics, including the current prestige of all significant currencies as well as stablecoins, the processes of mining and exchange platforms — with some noteworthy exceptions, including digital currencies authorized by central banks, or CBDCs — security tokens, nonfungible tokens, or NFTs, as well as decentralized finance, or DeFi.

The primary attraction of Monday's parliamentary debate was the considerable discrepancies between the two draught editions that were available for a vote. One amongst them included wording that might make any transactions with cryptos that use the proof-of-work, or PoW, protocol illegal. The troublesome clause would compel currency suppliers to present a comprehensive strategy outlining how they intend to comply with environmental sustainability criteria.

In the instance of Bitcoin (BTC) as well as other decentralized platforms, such data are in theory impossible to offer because there is no current central administrator or individual or group decision-maker.

That is why this edition of the document was earlier revised in order to avoid a regulatory stalemate. The problematic phrasing was not expected to be in the final form, as European Parliament Council on Economics and Monetary Affairs participant Stefan Berger confirmed previously.

The hardline variant of MiCa did come on the floor, however, it was met with opposition from the bulk of MEPs. According to Patrick Hansen, chief of strategy at cryptocurrency startup Unstoppable Finance, 32 participants of the ECON committee voted against the limited version, while just 24 voted in favor.

Prior to January 2025, cryptocurrency mining might still be classified as an "unsustainable" industry, excluding it from the backing and investment of European corporations and governments. Nevertheless, this is nevertheless distant from an absolute ban, the implementation of which may have had a significant impact on the situation of cryptocurrency in Europe.

The MiCa will now be considered in three stages by the European Parliament, the European Commission, as well as the Council of the European Union.

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