The ambitious legislative package of the European Union to regulate cryptocurrencies will go to the next stage of discussion without having a section to limit proof-of-work assets.
The framework for regulating digital assets of the European Union (EU), ‘Markets in Crypto Assets,’ reached the next discussion phase without the problematic provision to limit proof-of-work cryptocurrencies (PoW ) like Bitcoin. This information got revealed this Friday by many news outlets.
The Committee on Economic and Monetary Affairs of the European Parliament rejected the provision on Monday of last week in a vote with the majority of members in favor. The clause intended to ban the use and mining of PoW-based assets due to their high energy demand got left out of the preliminary draft of the MiCA.
The proposal, which got included in MiCA this March, highlighted that all digital assets would have to face minimum environmental sustainability standards concerning their consensus procedure to consolidate transactions before getting issued, offered, or admitted to trading.
The language of the project proposed a prohibition on the use of popular digital assets such as Bitcoin and Ethereum. However, the latter is updated to switch to a more environmentally friendly proof-of-stake (PoS) mechanism.
MiCA Passes Forward Without a PoW Ban
The draft bill is now migrating to a three-way debate between the European Parliament, the European Commission, and the European Council, without containing a provision to limit the use of PoW crypto assets.
European lawmakers have been talking about the legislative framework that intends to regulate digital assets. MiCA was a proposal that landed in 2020 as part of the European Commission’s Digital Finance package.
More recently, discussions heated up when the draft regulation added a set prohibiting digital asset such as Bitcoin. An earlier draft also added a similar policy, proposing a ban on crypto services based on environmentally unsustainable consensus procedures by 2025. But that section got rejected in early March due to different stances from industry players.
Although the proposal faced removal and Parliament voted in favor of exclusion on March 14, some actors exposed that the provision would appear again before the tripartite discussions. Stefan Berger, the representative who supervised the MiCA framework and stood against the condition, was one of them.
However, the period for a possible change before the final step for the tripartite discussion ended last week, Berger reported in a tweet. This action means that the draft has entered the next stage without significant changes. Berger said tripartite negotiations on MiCA got scheduled to start this week.
By: Jenson Nuñez
