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Why did EU lawmakers scrap part of MiCA bill on proof-of-work cryptos?

Manu Shankar is a senior journalist and editor with over 15 years of experience across leading media houses. At Kalkine, he writes on cryptocurrencies and equity markets. He’s passionate about sports and music....

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In what started as calls for banning cryptos, today, the majority of the nations are in favour of regulation. Leading economies of the world such as the US, Russia etc., are seemingly veering towards the notion that while the risks remain, the benefits that cryptocurrencies bring to the table cannot completely be ignored.

Hence, bringing them under the supervision of regulations of the various nations seem to be the most plausible solution to ensure that they are not utilised in any form of illicit activities.

Europe is another crypto hotbed with leading nations like Switzerland, France, Portugal, etc. They are increasingly proving to be crypto safe havens for investors. Therefore, it was perhaps not surprising to see the European Union lawmakers revisit their stance to ban bitcoins. 

Also read: Why are UK Advertising regulators miffed with Floki Inu ad? 

Why Did EU Lawmakers Scrap Crypto Ban From Draft of MiCA Bill?

What do the European Union lawmakers have to say?

European Union lawmakers have now scrapped a section of the Markets in Crypto Assets (MiCA) bill, which would have deemed it illegal for crypto service providers to deal in Proof-of-Work based coins. The PoW consensus mechanism is primarily used by leading crypto such as Ethereum to mine cryptos and secure the network.

But the MiCA bill, which was put to the vote on 28 February in front of the European Parliament by a coalition headed by Stefan Berger, has reportedly cancelled paragraph 61 (9c) of the bill.

The bill had earlier said to have mandated that by 2025 no crypto assets can be transacted within the EU region if they are "environmentally unsustainable." So, to avoid a ban, the crypto assets will have to meet "minimum environmental sustainability standards."

Also read: THORCHain (RUNE) crypto: Why is it bullish of late? 

There are sceptics who are not in favour of it and believe that a ban on Bitcoin and Ethereum mining in Europe will make it untenable to offer services to clients. This change of opinion has forced the vote to be delayed to a new date that will be announced soon. Berger believes that the respective passages of the draft report were misunderstood or misinterpreted as a PoW ban.

The environmental concerns that crypto brings have often been the topic of various crypto mining debates. It will be interesting to see what consensus the European lawmakers can eventually come up with, but for now, it seems this debate will take some time before it reaches a conclusion. 

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