Breaking: European Parliament Votes in Support of Crypto Mining (PoW) in Europe

ATFX

Publish date: Tue, 15 Mar 2022, 01:27 PM

The Crypto market has once more breathed a sigh of relief from various country restrictions as the European Economic and Monetary Affairs Commission (ECON) massively voted against the initially proposed Crypto Assets legislation and banning of Bitcoin mining - which means that mining Bitcoin or Ethereum is allowed is henceforth officially permitted in Europe.

The said bill, otherly known as MiCa, was initially intended to ban the proof-of-work based Cryptocurrency involving mining within the European Union. This would have crippled cryptocurrency hashrate increase that supports the security of the Blockchain technology.

MiCA is a regulatory framework that contains 126 articles, including a detailed plan for their implementation by the EU and Member States institutions. This bill draft was initially introduced to Parliament way back in 2020 as a part of its Digital Finance strategy.

Similarly, MiCA covers a range of Crypto-related subjects such as the status of major currencies and stablecoins, the operations of mining and exchange platforms. However, only Digital Assets issued by the Central Bank (CBDC) and other security tokens, NFT and DeFi projects are excluded from this bill.

According to a first-hand political observer of the event, it was observed that a majority of the members of the European Parliament from the “EPP, ECR, Renew & ID voted against it, while a minority of MEPs from Greens, S&D, and GUE mainly voted in favour.” A total of 32 votes was passed in rejection of the bill, while only 24 would support the bill.

On the contrary, the MEPs supported an alternative amendment from Stefan Berger, a German economist and politician of the Christian Democratic Union [CDU].

Implications of the Bill on Bitcoin and Crypto mining in Europe

Monday 14th of March will remain a memorable day for the journey in Crypto legislation in Europe. The European Union parliamentarians reject a vote passed for the Crypto Markets Assets [MiCA] legislation suggesting a ban on the mining process. Of course, mining is fundamental for all Blockchain technology development and security as the network's security is strongly built on Bitcoin hashrate development.

The bill passed by EU’s legislative body for regulating digital assets in its draft was designed to limit the use of cryptocurrencies powered by energy-intensive computing process, also known as proof-of-work [PoW] in Europe. However, Crypto mining was vindicated and supported by the majority votes cast by the European Parliament today. Many would consider this the first step towards Cryptocurrency official legislation in Europe.

However, according to the provisions in the bill, the crypto assets will be subjected to the EU’s “minimum environmental sustainability standards concerning their consensus mechanism used for validating transactions, before being issued, offered or admitted to trading in the Union.”

Nonetheless, the recently rejected bill will enable cryptocurrencies like Bitcoin and Ethereum, currently traded in the EU, to shift their consensus mechanism from PoW to proof-of-stake (PoS), suitable for the Cryptocurrency hashrate development.

With the Parliament finally voting against the de-facto PoW ban with a good margin, a level ground has been created for Bitcoin legalization in Europe. Further, the space opened up for discussions on regulating crypto-assets.

Above all, the MiCA draft no doubt will be negotiated during a trialogue between the EU Commission, Parliament, and the council next week, and if further approved, the law will come into force within a few months, and the crypto companies will be offered six months transition period to comply with the changing requirement.

Therefore, it is very obvious that the future holds so bright towards legalizing Bitcoin and other Cryptocurrencies within the EU in the nearest future.

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