The European Union (EU) has scrapped a planned law that would have effectively banned the popular cryptocurrency bitcoin across the EU. On Monday, the European Parliament’s economic and monetary affairs committee agreed to remove the provision from a draft of the EU’s proposed Markets in Crypto Assets (MiCA) framework, which governs digital assets.
The measure, which was introduced to the draught last week, aims to limit the usage of cryptocurrencies powered by the energy-intensive proof-of-work computing method among the EU’s 27 member states. Crypto enthusiasts all across the world reacted angrily to the suggestion. The vote on the clause in question was too close to call, and it may have been defeated by a small majority. According to the proposal, all cryptocurrencies must comply with the EU’s “minimum environmental sustainability standards in relation to their consensus mechanism.”
The rule proposed a phase-out plan for popular proof-of-work cryptocurrencies like bitcoin and ether, which are already traded in the EU, to transition their consensus mechanisms from proof-of-work to other methods that consume less energy, such as proof-of-stake.
Although ethereum is expected to switch to a proof-of-stake consensus method in 2022, it’s uncertain whether bitcoin will follow suit. Some authorities and politicians throughout the world have slammed proof-of-work because of energy concerns. Some EU politicians are afraid that renewable energy will be diverted from national use to support cryptocurrencies like bitcoin. Following the vote, the MiCA draft will go through a trilogue, which is a formal round of negotiations between the European Commission, the Council, and the Parliament.