- EU lawmakers rejected the proposed ban of cryptocurrencies that use the Proof-of-Work mechanism
- The proposal, which has been a hot debate in recent days, would have led to the outlawing of Bitcoin and other PoW cryptocurrency projects
Today, the European Parliament Committee on Economic and Monetary affairs voted on the proposed draft suggesting the ban of cryptocurrencies leveraging the Proof-of-Work consensus mechanism. The proposal, which could have compelled PoW cryptocurrencies to shift to sustainable mechanisms, failed to get enough backing during the vote and was consequently rejected.
The majority of EU parliamentarians voted against including the provision out of a draft of the Markets in Crypto Assets (MiCA)framework. Patrick Hansen was among the first to share news on Twitter.
"The ECON committee of the EU Parliament just voted against the de-facto POW-ban: 32 against, 24 in favor. Big relief & political success for the bitcoin & crypto community in the EU […] A majority of MEPs from the EPP [European People's Party], ECR [European Conservatives and Reformists], Renew [Renew Europe] & ID [Identity and Democracy] voted against it, while a minority of MEPs from Greens, S&D [Socialists and Democrats], and GUE [Left in the European Parliament] mainly voted in favor," Hansen, who is the Head of Strategy & Business Development at Unstoppable, wrote.
A 'compromise' will do at the moment
Hansen further stated that an 'alternative amendment from Stefan Berger was supported.' The 'compromise' that was arrived at states, "By 1 January 2025, the Commission shall present to the European Parliament and to the Council, as appropriate, a legislative proposal to amend Regulation (EU) 2020/852, in accordance with Article 10 of that Regulation, with a view to including in the EU sustainable finance taxonomy any cryptoasset mining activities that contribute substantially to climate change mitigation and adaptation."
The two leading cryptocurrencies, Bitcoin and Ethereum, use PoW mechanisms, but the latter is currently transitioning to a Proof-of-Stake mechanism. Until last week when the proposal to restrict the use of PoW cryptocurrencies was included in the MiCA draft, it looked unlikely that Bitcoin would switch to PoS.
While the provision to force the shift was quashed today, it brought Bitcoin's 'unsustainable' mechanism to the discussion table. Champions of environmentally friendly initiatives will likely continue keeping tabs on the subject.