- The EU Parliament will today vote on a proof-of-work ‘ban’
- The ban would actually be a set of environmental regulations that proof-of-work coins must pass
- Those that don’t will not be allowed to be used or traded within the EU
The EU Parliament will today vote on a recommendation to prohibit proof-of-work cryptocurrencies that don’t meet certain environmental criteria, following a last-minute re-entry into the agenda. The so-called ‘Bitcoin ban’, which is a misnomer as it applies to every proof-of-work cryptocurrency, had been pulled from the EU Parliament agenda last week but supporters managed to get it back in without time for dissenting voices to be heard on Friday. Were it to be passed, it would establish an environmental framework for proof-of-work coins which, if they didn’t meet the standards, would see them banned from sale and use within the European Union.
MiCA Framework Would Ban Dirty Cryptocurrencies
As we reported last week, the proposed vote on the Markets in Crypto Assets (MiCA) framework was indefinitely delayed following a majority vote, but those in favor of it managed to get it back on the agenda late on Friday before a further vote could be taken on the matter. This means that the MiCA framework vote will indeed go ahead today as originally scheduled.
The purpose of the MiCA framework is to prohibit coins using environmentally damaging proof-of-work consensus mechanisms from gaining further traction in the EU. Were it to be passed, the EU would establish a set of environmental regulations which all proof-of-work coins would have to pass in order for them to be allowed for use and trade within the bloc, with bans applying to all those that don’t pass.
This of course includes Bitcoin as well as Bitcoin Cash, Dogecoin, Monero, and Litecoin. The situation surrounding Ethereum is interesting, with the coin moving away from proof-of-work over the coming years. Quite where the EU is going to get its data from on proof-of-work emissions will be a topic of huge debate, with reliable data being hard to come by given the decentralized nature of the enterprise.
EU Proof-of-work Ban Damage Would be Limited
Cryptocurrency use in the EU is not as big as other parts of the world, with Germany and France having just over 2 million users each, double that of the next EU country, Italy. Any ban on Bitcoin, Ethereum etc would likely be an ideological blow rather than a literal one in the grand scheme of things, although Bitcoin would undoubtedly face a sell off if EU parliament members voted to pass the MiCA framework.
This first MiCA vote can be undone by a second vote which takes place later in the year, with more voters taking part, giving dissenters a chance to rally support for their cause.