Key points to remember
- A European law that proposes restrictions on environmentally unsustainable consensus mechanisms has been revised.
- This law could have possibly restricted the use of Bitcoin and other mining-based cryptocurrencies before the review.
- Stefan Berger, Member of the European Parliament, confirmed that the text in question had been deleted.
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A piece of European regulation has been revised to remove language that proposed a ban on mining-based cryptocurrencies.
MiCA regulation targets cryptocurrency mining
Language from a piece of legislation that was interpreted as problematic for Bitcoin and other proof-of-work cryptocurrencies has been removed.
The law in question is Markets in Crypto-Assets (MiCA), which offers regulations around the use of cryptocurrencies. The law was first proposed by the European Commission in September 2020.
The initial version of the law stated that from 2025, cryptocurrencies created and admitted to the EU should “not be based on or rely on environmentally unsustainable consensus mechanisms.” It also indicates that these mechanisms must “meet minimum standards of environmental sustainability”.
This language would apparently impose a Europe-wide ban on cryptocurrencies that rely on proof of work or mining, a practice that is notorious for its high energy requirements.
Bitcoin, which uses more than 170 terawatt hours (TW/h) of energy per year, would likely fall under this rule.
Other mining-based blockchains and cryptocurrencies, including Ethereum, Dogecoin, Litecoin, and Bitcoin Cash, would also be subject to the same rule, although these cryptocurrencies use considerably less energy than Bitcoin itself. same.
Restrictive rule has been revised
Now, the rule restricting environmentally intensive cryptocurrency mechanisms has been removed from the law, according to German-language crypto news site BTC Echo.
Stefan Berger, Member of the European Parliament, confirmed the revision :
“The paragraph is no longer in the text. The report still has to be voted on in committee. During this vote, we will then see where the majorities are. The decision has not yet been made. »
Berger also said The block that the next vote should take place between mid-March and the beginning of April. If approved, the law will be subject to further votes and debates before coming into force.
Despite the law’s apparent goal of restricting the use of cryptocurrency in the EU, it is unclear whether it will actually be able to achieve this goal. Most cryptocurrencies are designed to be transferred between peer wallets, which means governments can at best restrict exchanges, custodial wallets, and other centralized services.
Disclosure: At the time of writing this article, the author of this article owned BTC, ETH, and other cryptocurrencies.
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