The European Parliament will not hold a planned vote on crypto regulations after texts that could be interpreted as an attempt to ban high-power coins sparked backlash. The lawmaker leading the legislative effort said the issue needed to be clarified before MEPs could have a say, but the ECB chief insisted Europe should act quickly to prevent Russia to escape sanctions.
European Parliament postpones crypto legislation to address concerns over possible Proof-of-Work ban
The vote on the European proposal for new Crypto Asset Markets (MiCA) will not take place in the European Parliament as planned, on February 28. Stefan Berger, the rapporteur for the legislative package, took to social media to announce that he will be postponed on his request.
The move comes after a draft leaked to the press was found to contain provisions prohibiting the offering of cryptocurrency-related services based on “ecologically unsustainable consensus mechanisms”. These raised concerns that coins based on proof-of-work (PoW) mining, such as bitcoin, would be banned from January 1, 2025.
On Friday, Berger revealed that the debate around MiCA has indicated that certain texts in the project can be misinterpreted and understood as a ban on PoW. He acknowledged that the European Parliament could send the wrong signal if it approved them as they stand.
“In this context, I see the urgency to resume talks and negotiations with parliamentary groups on this subject and to establish clear facts on the #PoW issue,” the lawmaker said. tweeted in German. He promised to try to reach a compromise with all stakeholders that would provide crypto assets with a proper legal framework without challenging the concept of proof of work.
Members of the European Parliament (MEPs) from the left, the Greens and officials from several member states such as Germany and Sweden have called for an EU-wide ban on PoW mining, citing its increasing use of renewables at the expense of transitioning to climate neutrality in other sectors.
In January, the idea was backed by European Securities and Markets Authority (ESMA) Vice President Erik Thedéen, who said European regulators should try to steer the crypto industry towards methods less energy-intensive mining.
Meanwhile, European Central Bank President Christine Lagarde has urged the EU to quickly approve the regulation that would prevent Russia from using cryptocurrencies to evade sanctions imposed following its military invasion of the EU. ‘Ukraine. Quoted by Bloomberg, Lagarde specifies:
There are always criminal ways to try to circumvent a ban, which is why it is so important that MiCA is passed as soon as possible so that we have a regulatory framework.
If the MiCA is approved, the European Parliament will have to obtain the support of each member state and of the European Commission, which will be responsible for evaluating the proposal. A final decision on the package is expected later this year. Several EU members, led by Germany, insist that a new anti-money laundering agency should take responsibility for overseeing crypto in the bloc.
Do you expect the European Parliament to drop the MiCA provisions prohibiting mining with proof of work? Tell us in the comments section below.
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