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EP votes on PoW ban today, outcome undecided

EP votes on PoW ban today, outcome undecided

Last updated 29th Jun 2022
Disclosure
  • Legislators are looking to limit proof of work, an energy-intensive computing process used to mine Bitcoin
  • Proposal generated backlash from the global crypto community
  • EP wants to ban proof-of-work crypto even if the energy used were renewable

The European Parliament will vote on a proposal that might result in banning Bitcoin today with the outcome very much undecided, CoinDesk reported. The EP’s economic and monetary affairs committee will decide on a draft of the proposed Markets in Crypto Assets (MiCA) framework, a set of rules governing digital assets.

Vote is a close call

In a late addition to the draft, legislators are looking to limit proof of work, an energy-intensive computing process used to mine Bitcoin. The vote may be a close call, but a majority of committee members might vote against this limit, insiders report.

According to this provision, all crypto assets must become subject to the EU’s minimal environmental sustainability standards regarding the consensus mechanism used to validate transactions prior to being offered, issued, or allowed to be traded in the EU.

Cryptocurrencies like Bitcoin and Ethereum, which exchanges offer for trading in the EU, are subject to a phase-out plan to shift the consensus mechanism to a less energy-intensive one like proof-of-stake. Ethereum is moving to proof-of-stake, but this option may not exist for Bitcoin.

Global crypto community strikes back

The proposal generated backlash from the global crypto community. Circle Pay founder Jeremy Allaire tweeted:

Extremely high stakes vote in the EU. That such a proposal made it this far is extraordinarily concerning and unlikely to stand up to practical reality.

EP also against mining with renewable energy

Some EP members want to ban proof-of-work crypto even if the energy used were renewable. They are concerned that miners might use renewable energy for proof-of-work computing instead of channeling it into the national grid for public use.

Earlier, the provision proposed to ban proof-of-work crypto in the EU in January 2025. After criticism from crypto advocates, this version of the proposal was dropped. Eventually, the modified version found its way back into the latest draft.

Stefan Berger, who has been charged with oversight of the framework’s content and progress, is attempting to reach a compromise. Back in February, he told CoinDesk:

The Greens and Socialists, as you can imagine, are criticizing the proof-of-work concept and criticizing the energy use, saying that bitcoin needs more energy than the Netherlands.

Berger added he didn’t feel MiCA was the right option to settle energy-related or technological rules because its purpose was to regulate crypto as assets.

The EP will proceed to a formal round of negotiations with the European Commission and the European Council after deciding on the draft.

Daniela Kirova

Daniela Kirova

Daniela is a writer at Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. She has over 15 years of experience as a writer, having ghostwritten for several online publications in the financial sector.