Following negative reactions to text that might have been interpreted as an effort to ban crypto coins that are energy-intensive, the European Parliament has decided not vote on it. While the lead lawmaker for the legislation says there is more to clarify before MEPs are allowed to have a say on the matter, the head ECB said that Europe must act fast in order stop Russia from evading any sanctions.
European Parliament delays Crypto Legislation in order to deal with concerns about a proof-of work ban
The vote on Europe’s new Markets in Crypto Assets (MiCA) proposal will not take place in the European Parliament as scheduled, on Feb. 28. Stefan Berger (the rapporteur on the legislative package) took to social media and announced that it would be delayed at his request.
The move comes after a draft leaked to the press was found to contain provisions prohibiting the offering of services related to cryptocurrencies relying on “environmentally unsustainable consensus mechanisms.” These raised concerns that coins based on proof-of-work (PoW) mining, like bitcoin, would be banned from Jan. 1, 2025.
Berger disclosed Friday that the MiCA debate has shown certain draft texts can be misunderstood and misread as PoW bans. Berger acknowledged that it could be a mistake for the European Parliament to approve them as they were.
“In this context, I see the urgent need to resume talks and negotiations with the parliamentary groups on this topic and to establish clear facts on the #PoW question,” the lawmaker tweetedGerman He said he would try to find a compromise that all parties could agree on, which would give crypto assets a legal framework and not challenge the proof-of work concept.
MEPs from various countries, including the Greens, from the European Parliament (MEPs), have asked for an EU-wide ban of PoW mining. They cited its increased use of renewable energy, which is detrimental to the transition to climate neutrality in all other sectors.
In January, the idea was backed by the vice-chair of the European Securities and Markets Authority (ESMA), Erik Thedéen, who stated that European regulators should try to steer the crypto industry towards less energy-hungry mining methods.
Christine Lagarde (President of the European Central Bank) has called on the EU for swift approval of the regulation which would prohibit Russia from using crypto to escape sanctions after its invasion of Ukraine. Bloomberg quoted Lagarde’s explanation:
There are always criminal ways to try to circumvent a prohibition, which is why it’s so critically important that MiCA is pushed through as quickly as possible so we have a regulatory framework.
The approval of MiCA will require the European Parliament to secure the support from individual member countries and the European Commission. They will then be charged with evaluating the proposal. The final decision regarding the package will be made later in the year. Many EU countries led by Germany insist on the creation of an anti-money laundering organization to oversee crypto surveillance in the bloc.
Are you expecting the European Parliament not to repeal the MiCA provisions that ban proof-of work mining? Comment below.
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