The European Parliament’s proposal for attempts to limit the use of proof-of-work (PoW), a computing process that consumes a lot of energy, in the EU may perhaps result in the postponement of the planned Markets in Crypto Assets (MiCA) regulatory framework.
It is the desire of the European Parliament to minimize the use of PoW. EU MPs are also divided on the question of which agency should be in charge of putting MiCA into effect.
MiCA is the EU’s comprehensive crypto-regulation package, which was released in December 2017. Meanwhile, EU parliamentarians are divided on which agency should be in charge of implementing MiCA.
A mandate for proposed pioneering law for digital assets was formed by legislators prior to moving on to the next round of deliberations, which took place on March 1.
The controversial provision was nearly repealed after last Monday’s vote, but it was replaced with an alternative measure that would require the EU Commission, which is in charge of presenting new legislation to the European Parliament, to submit by 2025 a proposal to be included in the EU taxonomy on “any crypto-asset mining activities that contribute significantly to climate change.”
Earlier this week, the EU crypto community exhaled a sigh of relief after a draft of the MiCA, which had been contested, was amended to remove a controversial section that could have effectively outlawed bitcoin (BTC) due to energy concerns. The draft passed through a parliamentary committee vote with flying colors.
Although it is possible to switch Ethereum to proof-of-stake consensus, which is a less energy-intensive consensus mechanism, crypto aficionados, such as Hansen, believe that Bitcoin may not have the same choice in the near future.
Unstoppable Finance’s Head of Strategy, Patrick Hansen, made the following statement:
The [committee] finally ruled against prohibiting proof-of-work-based assets for EU firms, which I am relieved about,” says the author.
According to critics of the proposed clause, proposing that Bitcoin be transferred out of the Proof-of-Work (PoW) system may have showed how little lawmakers understand blockchain technology.