Europe votes tomorrow on regulation that threatens the use of Bitcoin in the region
The European Parliament’s Committee on Economic and Monetary Affairs votes on Monday (14) on a regulatory framework that could jeopardize the use of cryptocurrencies based on proof-of-work (PoW) consensus, such as Bitcoin and Ethereum, in countries members of the European Union.
According to Bloomberg, the new regulatory framework for cryptocurrencies, dubbed MiCA (Markets in Crypto Assets), has been worrying crypto market participants in recent weeks and had its vote postponed at the end of February.
The original text of MiCA had a provision that advocated banning proof-of-work cryptocurrencies from circulating in the region from January 2025. The main argument of the text was that these coins were “environmentally unsustainable” due to the high energy consumption required to its production.
After strong criticism from the sector, the parliamentarian responsible for the project, Stefan Berger, withdrew the ban from the text, but stressed that there was still no final decision on the matter.
The new version of the bill that will be voted on tomorrow, although it appears to be more reasonable, has not yet discarded provisions that threaten proof-of-work cryptocurrencies.
According to CoinDesk, there is a measure similar to the previous one that says that cryptocurrencies “will be subject to minimum standards of environmental sustainability in relation to the consensus mechanism used to validate transactions, before being issued, offered or admitted to trading in the European Union”.
According to the text, proof-of-work consensus will be exempted from meeting sustainability standards only if it is used on a “small scale”. However, what is understood by “small scale” has not yet been determined by parliamentarians.
The bill also says that energy-intensive cryptocurrencies that are already in use in the EU must create a plan to ensure compliance with the new requirements.
Cryptocurrencies such as Ethereum, which is soon to abandon proof-of-work (PoW) consensus and adopt proof-of-stake (PoS), may be exempt from the new regulatory framework. The scenario is more pessimistic for bitcoin, whose possibility of changing its mining method is not – and never has been – under discussion.