EU Drops Proof-of-Work Ban, To Vote On MiCA Crypto Law Next Week

The European Union will vote on passing a key cryptocurrency law next week, with a widely-criticized ban on proof-of-work tokens to no longer be considered.

Member of Parliament Stefan Berger tweeted  that the Economic and Monetary Affairs Committee (ECON) will vote on the bill on March 14. The proposal, called Markets in Crypto Assets, or MiCA, intends to lay out the regulatory framework that will recognize crypto assets under European law.

Berger, the rapporteur of the bill, suggested that crypto assets should be recognized as an investment and regulated by the taxonomy system, like all other financial products in the EU. He also said that a separate discussion on proof-of-work is no longer planned in MiCA.

With MiCA, the EU can set global standards. Therefore, all those involved are now asked to support the submitted draft & to vote for MiCA. Strong support for MiCA is a strong signal from the EU Parliament for a technology-neutral and innovation-friendly financial sector.

-Berger

ECON was initially supposed to vote on the bill on February 28. But Berger had postponed the vote, citing concerns over a potential ban on proof-of-work tokens due to their high energy requirements. Crypto’s large energy footprint has been a sticking point for EU regulators in discussions involving MiCA.

As a rapporteur, it is crucial for me that the MiCA report is not misinterpreted as a de facto #Bitcoin ban

-Berger

MiCA, which is part of a broader digital finance reform in the EU, was introduced in 2020, and adopted by the European Council in 2021. Even if it gains a majority vote next week, the proposal will still need to be considered by the European Council.

Russia-Ukraine conflict fast-tracks crypto laws

Calls for comprehensive regulation of cryptocurrencies grew in the wake of the Russia-Ukraine conflict this year. Lawmakers feared that Russia could use cryptocurrencies to bypass strict economic sanctions against the country.

Recently, European Central Bank Chief Christine Lagarde highlighted the need for immediate crypto regulations. French Finance Minister Bruno le Maire also said that the bloc will ensure that Russia cannot bypass sanctions through crypto.

U.S. President Joe Biden is also set to release an executive order on crypto this week. His administration had included crypto in its sanctions against Russia, and warned exchanges against facilitating blacklisted entities.

While these fears have been dismissed by experts, they have helped bring crypto into the spotlight and pave the way for more laws recognizing the space.