EU may ban PoW cryptocurrency BTC mining from 2025

The European Parliament, one of the EU’s legislative branches, has moved to ban bitcoin and other proof-of-work (PoW) cryptocurrencies.

The final draft of a high-profile package of cryptocurrency regulations, the Markets in Crypto Assets (MiCA) framework, includes a provision that prohibits “environmentally unsustainable” consensus mechanisms.

A previous draft of the MiCA framework included a strongly worded clause proposing to ban cryptographic services that rely on environmentally unsustainable consensus mechanisms from January 2025. But the rule was later scrapped after backlash from the industry. EU lawmaker Stefan Berger, who is in charge of the legislative framework for MiCA, said at the time that the paragraph in question had been removed, but no final decision had been made.

A version of the new draft contains similar provisions, but significantly weakened from the original provisions. It said crypto assets should follow minimum environmental sustainability standards in terms of the consensus mechanisms they use to verify transactions before they are issued, offered or permitted to trade in the EU.

According to the clause, if the PoW mechanism operates on a small scale, it does not need to meet the sustainability criteria. The extent of the small-scale operation is yet to be determined. It also said that before the legislation takes effect, energy-intensive cryptoassets already in use across the EU will have to establish and maintain a phased rollout plan to ensure compliance with requirements set out in another part of the framework.

The European Parliament’s Committee on Economic and Monetary Affairs will vote on Monday on a new regulatory framework for crypto assets, which could speed up the measure’s passage. Industry executives said the measure could ban major virtual currencies, including bitcoin, in Europe.

Once the draft is passed, it will mean that after January 2025, Bitcoin and other virtual currencies with POW as the consensus mechanism will be illegal currencies. At the same time, businesses will be banned from offering any services related to proof-of-work (PoW) cryptocurrencies , potentially threatening the very existence of bitcoin mining operations across the EU.

According to data released by the Cambridge University Mining Map, the European Union accounts for about 12-14% of the Bitcoin network’s global hashing power, with Germany and Ireland contributing the majority.

HaENXDDAKZ4yW0TGQQ0ln1KXMRkqkl430RhvuSdz.pngParis lawmaker and law council member Pierre PERSON condemned the draft in a document. He pointed out that by banning Bitcoin and Ethereum, by complicating the use of NFTs and DeFi, the European Parliament is mortgaging our monetary and financial sovereignty. Whether it’s DeFi or NFTs, these technologies are still in the early stages of development. We are going to regulate future use cases, not technology. Parliament is porting old world financial regulation to a new technology with a different structure.

In addition, Pierre also pointed out that NFTs will also be regulated. Only NFTs that are not listed on exchanges are considered outside the scope of cryptoassets.

IntFlrhdYpgDqmPAk1qtzCkVfMqFvdSwJwQPo05a.pngPatrick Hansen, head of growth and strategy at decentralized finance startup Unstoppable Finance, described the proposal as “suicidal,” predicting it would kill the entire cryptocurrency industry in the European Union.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/eu-may-ban-pow-cryptocurrency-btc-mining-from-2025/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2022-03-14 10:15
Next 2022-03-14 10:18

Related articles