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.
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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.
- The Economic and Financial Affairs Council of the EU, which is comprised of finance ministers of all 27 member states, unanimously approved the MiCA crypto regulation.
- The EU’s finance ministers also also gave their consent to new measures that will allow tax authorities to collect data on individuals’ cryptocurrency holdings.
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- The U.S. SEC claimed in its response that it was under no obligation to issue new regulations for crypto, and that rules for crypto were already published and were sufficient.
- The agency also tried to distance itself from any public comments made by its chair Gary Gensler, particularly regarding his statement that most cryptocurrencies are securities.
- The cryptocurrency exchange is estimated to have more than 100,000 creditors, and between $500 million and $1 billion in both assets and liabilities.
- The Chapter 11 filing came less than a month after the U.S. SEC filed charges against Bittrex and its former CEO, claiming they were operating an unregistered securities exchange.