EU Removes Bitcoin Prohibition Rule From Draft of Crypto Regulations

There is no longer a “prohibition” on Bitcoin under EU crypto legislation. An EU-wide regulatory framework for crypto assets would be established under the Markets for Crypto Assets bill. As a result of phrasing referring to “unsustainable consensus mechanisms,” the bill was postponed last week. The text has now been updated to remove that phrase.

A section that would have made it illegal for crypto services to trade in currencies based on proof-of-work — the consensus process used by Bitcoin and Ethereum to “mine” new money and protect their networks — was removed from a draft European Union regulation. Markets in Crypto Assets (MiCA) is a bill filed by Stefan Berger’s alliance in the European Parliament on Monday, February 28.

When several lawmakers objected to a section requiring evidence of employment, the bill was put on hold until late last week. There has been a complete removal of paragraph 61 (9c) from the bill, although the vote has not yet been rescheduled, according to Berger.

In Europe, MiCA has the power to transform people’s perceptions about bitcoin. As stated in September 2020, the European Central Bank will have to implement “consistent rules for crypto-asset service providers and issuers at EU level.”

A legislative framework for crypto throughout the European Union, something that the United States and other nations are currently working on, would be provided under this legislation.
Crypto aficionados, on the other hand, took notice of one specific statement. No crypto assets may be produced, sold or exchanged in the EU after 2025 if they employed “environmentally
unsustainable consensus procedures,” according to the new EU regulation.

To escape a ban, crypto assets would have to fulfill “minimal environmental sustainability standards.” It was claimed by critics of the bill that it would essentially restrict mining of Bitcoin and Ethereum in Europe, and would also make it hard for users to maintain proof-of-work tokens.

Berger claims that the lawmakers did not intend for this to happen. When announcing the postponed vote on Friday, he said that “particular portions of the draught report can be misunderstood and taken as a POW prohibition.”

On the other hand, environmental concerns weigh heavily on Europe, whose member states are trying to meet the climatic conditions of the Paris Agreement. According to Finanspektionen, Sweden’s financial authority, mining Bitcoin and other proof-of-work currency was a waste of energy and should be banned.