Lawmakers in Europe rejected the problematic provision to prohibit proof-of-work (PoW) cryptocurrencies like Bitcoin.

Europe will not prohibit Bitcoin, and other digital currencies focused on proof-of-work (PoW) procedures. The European Union Parliament rejected a debatable provision that would restrain the use of PoW-based digital currencies due to their effects on the natural environment this Monday.

Parliament’s economic and monetary affairs committee decided together through a vote to keep the provision out of the draft of the framework ‘Markets in Crypto Assets,’ the European bloc’s sweeping legislative package to set a regulation over digital assets.

Patrick Hansen, strategy leader of the Defi project, Unstoppable Finance, revealed the situation through his Twitter account, mentioning sources linked to the economic committee. According to Hansen, the provision got rejected after gaining 34 votes against 24 favorable votes. News outlet CoinDesk also followed the decision closely, citing people related to the proposal.

The Argument behind the Provision

The provision in question intends to limit the use of digital assets driven by an energy-intensive computing process named PoW in the 37 EU member states.

The proposal highlighted that all would be subject to minimum environmental sustainability standards concerning their consensus procedure to validate transactions before getting issued or admitted to sealing a trade.

According to CoinDesk, it also proposed a phase-out plan to switch its consensus procedure from proof-of-work to other powerless ways such as proof-of-stake.

The regulations would have limited the use of Bitcoin and Ethereum. However, the impact on the latter would have been less, as the second-biggest cryptocurrency is upgrading to switch to a proof-of-work method.

A similar provision got also added to the draft MiCA and then withdrawn in early March after widespread rejection from the cryptocurrency industry. Although less strict than the previous one, the most recent proposal also got criticized by the crypto community due to the impact caused on the Bitcoin environment.

Discussion about PoW is far from Reaching an End

The MiCA draft will now go to the discussion stage between the European Commission, the council, and Parliament. However, the PoW discussion is far from reaching an ending point. The groups that have lost the vote could still show an opposite stance against a fast-track MiCA procedure through a series of discussions and bring another encounter with the whole Parliament.

Hansen explained that this situation would bring the debate regarding the POW into the high-level political arena. Since the implied parts cannot predict how it would develop, it should get avoided. Even if the vote on POW can’t face a change, it would unnecessarily settle a delay in the regulation for at least some months.

Proof-of-work, particularly crypto mining activity, has been facing a heavy wave of criticism from some regulators worldwide due to energy concerns, even before the use of renewable energies. In Europe, politicians and regulators from various Nordic countries have requested more robust measures to deal with Bitcoin mining since last year.

By: Jenson Nuñez

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