During the European Parliament’s session on Monday, the European Union rejected proposals to ban the cryptocurrency Bitcoin within the bloc but set out new draft rules to provide a better protection for consumers as well as safer mining.
EU’s legislation for regulating digital assets, the Markets in Crypto Assets (MiCA) framework, voted 30-23 by the economic and monetary affairs committee of the European Parliament.
The success was tweeted by Stefan Berger, a member of the European Parliament and a MiCA rapporteur:
MiCA consists of 126 articles that are followed by a plan of how they are to be implemented by EU and member state institutions. In its Digital Finance strategy, the European Commission originally introduced the draft back in 2020.
The bill was updated last-minute over the weekend as a result of a final-minute addition, which attempted to limit the use of cryptographic systems that rely on an energy-intensive process called proof-of-work (PoW).
A phase-out plan was proposed for popular crypto currencies like bitcoin and ether, which are already traded in the EU, to switch from proof-of-work to less energy-intensive methods like proof-of-stake.
Politicians and regulators all over the world have harshly criticized proof of work due to energy concerns. In an effort to promote energy sustainability, several EU parliamentarians have been advocating a ban on PoW cryptos. In addition to this, they have also voiced concern that switching to renewable energy would mean that such energy would be used primarily for crypto mining rather than for public consumption.
