Tuesday, October 4, 2022
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EU’s MiCA crypto revised legislation submitted for voting, no ban on PoW mining

The EU’s Markets in Crypto Assets (MiCA) legislation has been filed to the European Parliament’s Economic and Monetary Affairs Committee (ECON), according to Stefan Berger, the regulatory package’s spokesperson. On March 14, 2022, committee members will vote on the legislation. A clause prohibiting organisations from offering services for digital currencies relying on proof-of-work (PoW) mining techniques is absent in the latest legislation. An example of such PoW mining algorithm is Bitcoin which currently has the highest market capitalization among alternate coins. Earlier, the rule was suggested by the Left, Greens, and Social Democrats, however, it was eventually repealed after an outcry from the crypto business and community.

Several EU member states’ officials and authorities had urged for a Union-wide prohibition on PoW mining, which consumes more energy than some other methods. Sweden pressed on such a move, noting bitcoin mining’s increased usage of green energy at the expense of other sectors of the economy’s climate neutrality objectives. 

 

The spokesperson informed that through MiCA, the European Union can set global standards, and he also urged everyone participating in the process to support the proposal. He added that powerful support for MiCA is a strong signal from the EU Parliament for a technology-neutral and innovative financial industry. According to Berger, “The plan builds a regulatory framework that would pave the way for innovation, consumer protection, and legal clarity in the crypto sector, while also establishing stable supervisory bodies in the domain of crypto assets.”

 

MiCA’s execution will be decided in a dialogue between the European Parliament, the Council of the EU, and the European Commission after the passage of legislation. Christine Lagarde, President of the European Central Bank, asked the EU in February to implement legislation to prevent Russia from using cryptocurrencies to avoid sanctions imposed in response to its invasion of Ukraine.

 

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