EU Revises Laws Concentrating on Proof-of-Work Crypto Mining

Key Takeaways

  • A European regulation that proposes restrictions on environmentally unsustainable consensus mechanisms has been revised.
  • That regulation may have conceivably restricted using Bitcoin and different mining-based cryptocurrencies previous to revision.
  • Stefan Berger, a member of the European Parliament, confirmed that the related textual content has been eliminated.

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A bit of European regulation has been revised to take away language that proposed a ban on mining-based cryptocurrencies.

MiCA Laws Focused Crypto Mining

Language in a bit of laws that was interpreted as problematic for Bitcoin and different Proof-of-Work cryptocurrencies has been eliminated.

The regulation in query is Markets in Crypto-Property (MiCA), which proposes laws round using cryptocurrencies. The regulation was first proposed by the European Fee in September 2020.

The preliminary model of the regulation mentioned that, starting in 2025, cryptocurrencies created and admitted within the EU ought to “not be based mostly or depend on environmentally unsustainable consensus mechanisms.” It additionally says that these mechanisms ought to “adjust to minimal environmental sustainability requirements.”

That language would seemingly impose a Europe-wide ban on cryptocurrencies that depend on Proof-of-Work or mining, a apply that’s famous for its excessive vitality calls for.

Bitcoin, which makes use of over 170 terawatt-hours (TW/h) of vitality per 12 months, would presumably fall beneath that rule.

Different mining-based blockchains and cryptocurrencies—together with Ethereum, Dogecoin, Litecoin, and Bitcoin Money—would presumably fall beneath the identical rule as effectively,though these cryptocurrencies use significantly much less vitality than Bitcoin itself.

Restrictive Rule Has Been Revised

Now, the rule proscribing ecologically intensive cryptocurrency mechanisms has now been faraway from the regulation, in accordance with German-language crypto information web site BTC Echo.

Stefan Berger, a member of the European Parliament, confirmed the revision:

“The paragraph is not within the textual content. The report has but to be voted on in committee. On this vote, we’ll then see the place the majorities lie. The choice has not but been made.”

Berger additionally instructed The Block that the subsequent vote is ready to happen between mid-March and early April. If accepted, the regulation will face additional voting and debates earlier than it takes impact.

Regardless of the regulation’s obvious purpose of proscribing cryptocurrency use within the EU, it’s unclear whether or not it’s going to truly be capable of accomplish that purpose. Most cryptocurrencies are designed to be transferred between peer wallets, that means that governments can at finest prohibit exchanges, custodial wallets, and different centralized providers.

Disclosure: On the time of writing, the writer of this piece owned BTC, ETH, and different cryptocurrencies. 

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