EU rejects crypto proposal which could have banned Ethereum and Bitcoin
A European Union committee has rejected draft rules which could have restricted the use of Bitcoin and Ethereum across the bloc.
The European parliament’s economic and monetary affairs committee today voted down a proposed amendment to the Markets in Crypto Assets (MiCA) framework, the EU’s draft regime for regulating digital assets.
An amendment to the bill made over the weekend could have banned trading of crypto currencies such as Ethereum and Bitcoin which use the energy intensive mining process proof-of-work.
However, at a vote today committee members voted against the proof-of-work ban, with 23 members voting for the amendment 30 against and six abstentions.
The vote is a win by Europe’s crypto community which strongly opposed the draft proposal which required crypto projects to meet sustainability standards. Patrick Hansen, the head of strategy for crypto company Unstoppable Defi described the move as a “big relief and political success for the bitcoin and crypto community in the EU.”
His comments come after the head of Crypto UK, Ian Taylor, yesterday warned that Bitcoin, Ethereum, NFTs and Defi faced an “existential threat” from the amendment which could outlaw projects which rely on proof-of-work mining.
Commenting on today’s vote, Taylor said “we can all breath a sigh of relief for now, some semblance of logic has prevailed.”
Under the proof-of-work consensus mechanism, which is used by the world’s largest crypto currencies Ethereum and Bitcoin, miners use powerful computers to try and solve complex algorithmic puzzles in order to verify transactions and create new coins.
Bitcoin environmental footprint is a major concern for European regulators with its total energy consumption exceeding 130 TWh per year, more than entire countries including Ukraine, Norway and the United Arab Emirates.
Read more: Crypto industry warns of ‘existential threat’ from draft EU regulation