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.