The final draft of the Markets in Crypto Assets regulatory framework (MiCA), a form of EU law regulation, is set to be discussed by the European Parliament on Monday, March 14, 2022. A new proposed amendment banning energy-consuming proof-of-work cryptocurrencies including popular digital currencies Bitcoin (BTC) and Ethereum (ETC) in European countries have been added.
According to Stefan Berger’s statement with German crypto media outlet BTC-ECHO last February 22, as one of the people behind the proposed framework, the likelihood of the proposal being approved is ‘very likely’. It is also being supported by members of the Social Democratic party along with the Greens and Left Party.
With the draft still in the works, digital currencies using a proof-of-work mechanism can be added since it requires solving mathematical computations and consumes large amounts of energy that can take a toll on power grids and affect countries’ energy supply.
The provision in the bill will be discussed in the second week of March. As a result, crypto investors around the world have met the framework with negative reactions. Some are supporting the amendment while others say that creating stricter regulations could be the key instead of a complete ban.
If implemented, European countries will no longer support proof-of-work digital currencies and owning or trading crypto such as Bitcoin will be considered illegal. The same goes for local businesses that make use of these cryptocurrencies and accept them as modes of payment.
For now, there are no specific details as to how the amendment will be discussed and whether or not the final decision will be in favour of implementation. If passed, then this means that Bitcoin and other proof-of-work cryptocurrencies will be banned by January 1, 2025, three years from now.
Currently, the Ethereum network is transitioning to a proof-of-stake mechanism for a more sustainable and environmentally-friendly process. However, the same cannot currently be said for Bitcoin at the moment. If the ban will be implemented, then this could prevent most European investors to access a wider range of cryptocurrencies in the market.
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