2022-3-28 13:12 |
The European Union will be moving ahead with the proposed Markets in Crypto Assets (MiCA) legislation. However, the legislation will not include a ban on proof-of-work mining.
Proof-of-work is a consensus implemented by blockchains such as Bitcoin (BTC/USD) and Ethereum (ETH/USD). The PoW consensus has caused concerns over its energy-intensiveness, resulting in calls to ban cryptocurrencies that use the consensus.
EU will not ban proof of workLawmakers in the EU have been looking for the best ways to regulate the buzzing cryptocurrency sector. The MiCA legislation moves to the next stages, but it will not contain a provision that bans cryptocurrencies such as Bitcoin that use the proof-of-work consensus.
On March 14, the European lawmakers decided to halt speculations that it was banning proof-of-work cryptocurrencies. Such a ban could have affected the Bitcoin mining sector and caused a similar market plunge, such as when China banned private cryptocurrencies last year.
Last year, a report from Cambridge University said that Europe currently accounts for around 12% to 14% of the Bitcoin mining hash rate. Most BTC mining activities are concentrated in Germany and Ireland. Therefore, even if a PoW ban is imposed in Europe, the impact on the global hash rate would not be very significant.
EU MiCA legislationThe MiCA regulation is being spearheaded by Stefan Berger of Germany. Last week, the lawmaker stated that his recommendation of not imposing a ban on PoW consensus has not been opposed, noting that this was a step towards supporting innovation.
“Good News! My mandate is NOT challenged. I will now go into trilogue negotiations with the position that there will be no #PoW ban. The EU parliament gives me tailwind & shows innovative strength,” said a translation of Berger’s tweet.
The EU parliament seeks to introduce regulations across the crypto space. These regulations will touch on assets such as non-fungible tokens (NFTs), decentralized finance (DeFi), etc. The current discussion revolves around whether these assets should be included in the MiCA legislation. The lawmakers are also debating which regulatory body will take charge of the cryptocurrency space.
The post EU lawmakers oppose a ban on proof-of-work cryptocurrencies appeared first on Invezz.
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