The Committee on Economic and Monetary Affairs (ECON) is a committee of the European Parliament that is responsible for the regulation of financial services, the free movement of capital/payments, taxation and competition policies, oversight of the European Central Bank, and the international financial system. Recently, the Committee sat to deliberate over an action that could either gear the world forward, towards a more global revolution or instigate an action which will mean a, leave it as it were the situation.
A proposed rule that could have, in effect, banned the popular cryptocurrency bitcoin across the European Union (EU) has been quashed. The European Parliament’s economic and monetary affairs committee voted 30-23 on Monday to keep the provision out of a draft of the proposed Markets in Crypto Assets (MiCA) framework, the EU’s comprehensive regulatory package for governing digital assets to which Six committee members abstained.
Chilling With The Big Boys: Bitcoin
The provision which was added to the draft last week sought to limit the use of cryptocurrencies powered by an energy-intensive computing process known as proof-of-work across the EU’s 27 member states. The proposal met with a heavy backlash from crypto advocates worldwide. Although there are plans to move ethereum to a proof-of-stake consensus mechanism this year, it’s unclear whether the same can be done for bitcoin.
One of the facts which have posed a concern towards members of the EU panel is that there seems to be a gradual tilt of renewable energy to Bitcoin rather than National use, resulting also from the use/adoption of a Proof-of-work system. This concern and heavy criticism were shared by some regulators and politicians.
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As per the provisions in the bill, the crypto assets will be subjected to the EU’s “minimum environmental sustainability standards concerning their consensus mechanism used for validating transactions, before being issued, offered or admitted to trading in the Union.” This provides cryptocurrencies like Bitcoin and Ethereum, currently traded in the EU, to shift their consensus mechanism from PoW to proof-of-stake [PoS].
The EU parliamentarians have been pushing for a bank on PoW cryptos over energy concerns for a long time now. Now that the parliament has voted against the de-facto PoW ban with a good margin, it leaves space for further discussion on regulating crypto-assets.
Bitcoin Should Be The Least of the EU’s Concerns
Bitcoin [BTC], the first and most popular cryptocurrency, was created as a solution to get beyond the limitations of centralized systems. It was the money designed for the common man. While the asset remains all of those things, it has also attracted the attention of environmental activists from all over the world.
This reached the government officials, as the European Union [EU] was on the threshold of prohibiting the use of the mechanism that powers Bitcoin. Climate change has become an alarming concern to many, ergo, governments across the globe have been exploring sustainable and eco-friendly lifestyles. Now, Bitcoin employs the proof-of-work [PoW] computing process which is energy-intensive and has thus been a target of many environmentalists.