No PoW ban by European Parliament, MiCA draft passes for the next round

European Parliament’s Committee on Economic and Monetary Affairs’ members finally voted against the proposed amendment in the Markets in Crypto Assets (MiCA) bill that was aimed to limit the use of proof-of-work cryptocurrencies in the region.

The provision was aimed to shift the consensus mechanism of cryptocurrencies that use PoW to something more energy-efficient like proof-of-stake. 

The decision of not opting for the change comes as a huge relief to the crypto community which was highly opposing the proposal. 

Changes in MiCA aimed to ban Bitcoin

MiCA, a regulatory framework, contains multiple articles and a detailed plan of their implementation by the European Union’s and member states’ institutions. Back in 2020, the EC first came up with the draft under its broader strategy on Digitizing the financial system.

Cryptocurrencies like Bitcoin and Ethereum that work on PoW were targeted through the recent changes.

The problematic line would compel currency issuers to present a detailed strategy outlining how they will meet environmental sustainability standards.

While Ethereum is already working on shifting to proof-of-stake, in the case of Bitcoin (BTC) and other decentralized systems, such information is impossible to provide in principle because no central operator or individual or collective decision-maker exists.

The hardline version of MiCa eventually made it to the floor, but it was met with opposition from the majority of MEPs. 32 members of the ECON committee voted against the limited version, while just 24 voted in favor.  

2/ A majority of MEPs from the EPP, ECR, Renew & ID voted against it, while a minority of MEPs from Greens, S&D, and GUE mainly voted in favor.

Instead, this alternative amendment from Stefan Berger was supported.

What does that mean for POW? pic.twitter.com/K11ZofVoN3

— Patrick Hansen (@paddi_hansen) March 14, 2022

Members of the Green fraction and the Progressive Alliance of Socialists and Democrats made up the majority of the latter minority.

The MiCa will now be submitted to a three-way review by the European Parliament, the European Commission, and the European Union.

The recent opposition of such an amendment has been a relief and political success for Bitcoin and its lovers. It is reported that the bill would come into force in a few months.