EU Parliament Votes Down PoW Limiting Proposal

  • Тhе proposed change to the Markets in Crypto Assets (MiCA) regulatory framework would have banned PoW cryptocurrencies across the EU’s 27 member states.
  • The Committee on Economic and Monetary Affairs instead voted in favor of a compromise, which calls on the European Commission to offer alternative regulation by 2025.
eu crypto

Shutterstock

The European Parliament’s Committee on Economic and Monetary Affairs has voted down a proposed rule on Monday which would have banned proof-of-work (PoW) cryptocurrencies from the EU.

According to the results posted on the Parliament’s website, 30 members of the committee were opposed to the proposed change to the Markets in Crypto Assets (MiCA) framework, while only 23 voted for it. The results are a huge relief for the crypto community, as the provision would have limited the use of PoW cryptocurrencies across the EU’s 27 member states.

The MiCA regulatory framework — which was introduced by the European Commission back in 2020 — contains around 126 articles, and a detailed plan for their implementation in the EU. It also covers a wide range of crypto-related subjects, including the status of stablecoins, mining and exchange platforms, security tokens, non-fungible tokens (NFTs), and decentralized finance (DeFi).

On Monday, two different versions of the MiCA draft were put up for vote, with one containing the proposed rule that would have required cryptocurrencies to be subject to the EU’s “minimum environmental sustainability standards” when it came to consensus mechanism. While it was shot down, the proposal included a phase-out plan for networks to shift from PoW to other methods that use less energy, such as proof-of-stake (PoS).

The MiCA version that was accepted by the committee will now continue on its way through the EU institutions, with the next step being a “trilogue”, a formal round of negotiations between the European Commission, Council, and Parliament. While it does not contain a PoW ban, MiCA will direct the EU Commission to present a legislative proposal to “amend Regulation (EU) 2020/852, with a view to including in the EU sustainable finance taxonomy and crypto-asset mining activities” by 1 January 2025.

Discussion
Related Coverage
Gibraltar to Combat Crypto Market Manipulation With New Rules
  • The legislation will implement new standards for crypto market integrity in Gibraltar, designed to combat insider trading and market manipulation in the sector.
  • DLT providers will now be required to seek out and prevent insider trading, and the publication of misleading information aimed at manipulating the crypto market.
April 27, 2022, 4:41 PM
gibraltar

Shutterstock

Singapore Passes Law to Tighten Rules for VASPs
  • The Financial Services and Markets Bill requires VASPs doing business outside Singapore to be licensed and subject to AML and CFT requirements.
  • The Monetary Authority of Singapore will also receive additional power when issuing prohibition orders against industry figures who are unfit to perform “key roles, activities and functions”.
United Kingdoms to Become Global Crypto Hub
  • The UK government said the first step to becoming a global crypto hub is to recognise stablecois as a valid for of payment.
  • A new “Cryptoasset Engagement Group” will also be created, alongside a financial market infrastructure sandbox for DLT experimentation.