The European Parliament will discuss several laws to regulate cryptocurrencies at the end of February. Erik Thedéen and Björn Risinger have promoted the ban on Bitcoin mining in Europe since November 2021.
Representatives of Swedish regulatory institutions included the ban on Bitcoin mining in the discussions on cryptocurrency regulation in the European Parliament. The political institution added the proposal to the package of laws called MiCA (Markets in Crypto Assets). The latter will regulate crypto-assets in all the countries of the European Union.
The European Parliament recently had access to the draft law, which contains a provision that prohibits using proof-of-work (PoW) algorithms like Bitcoin.
Erik Thedéen, from the Environmental Protection Agency, and Björn Risinger, from the Swedish Financial Supervisory Authority, proposed the bill in early November 2021.
Last year, the officials released a report on their views on the environmental impact of mining cryptocurrencies using the PoW consensus mechanism. The text includes a call to the authorities of Sweden and the rest of Europe to ban the activity. At the beginning of 2022, the regulators said that it is necessary to meet the environmental goals of the Paris Climate Change Agreement.
Likewise, the provision in the MiCA regulation seeks to prohibit service providers in the sector operating with PoW minted cryptocurrencies. The bill would exempt small-scale operations that do not affect the goals to reduce energy consumption in the European Union. If the ban receives approval, it will enter into force in January 2025.
Everyone Will Know the Final Proposal on February 28th
The proposal seems to have gained traction among parliamentarians from Germany, Spain, and Norway. Last week, the Central Bank of Hungary also said that it supports a ban on Bitcoin mining. The governor of the financial institution György Matolcsy expressed he agreed that cryptocurrencies contribute to illegal activities.
According to local media, German parliamentarian Stefan Berger said that the approval of the proposal would be probable. The president of the Committee on Economic and Monetary Affairs of the European Parliament is one of the congressmen that favor banning Bitcoin mining.
The Parliament will have to decide what to do about the draft of the MiCA regulatory package on February 28th. Following the vote, the EU Commission, Parliament, and the Council of member states will have a tripartite dialogue. After that conversation ends, the Commission will evaluate the parliamentary proposal.
Reasons to Ban the Mining of Bitcoin and Other Cryptocurrencies
Many regulators from different countries have tried to control or ban Bitcoin and other decentralized cryptocurrencies. They allege that those assets pose a risk to the stability of the financial and banking systems. They also say that mining them harms the environment due to the carbon emissions from farms.
Of course, others favor using crypto assets in the economy and legalizing them as money. The president of The Salvadoran government was the first to adopt Bitcoin as legal tender, and other countries want to follow its example. Legislators are meeting to discuss this subject to decide whether to approve or reject the bills they receive.
By Alexander Salazar
