Mediaboss Marketing

The cryptocurrency community hailed a decision by a European Union committee rejecting a proposal that could have led to a ban on energy-intensive form of mining.

The European Parliament's economic and monetary affairs committee passed the proposed Markets in Crypto Assets (MiCA) framework, the EUs legislation for governing digital assets.

The committee turned down a last-minute addition to the bill that sought to limit the use of cryptocurrencies that use the proof-of-work mining process, which has beenhave been criticized by environmentalists for its energy consumption.

The measure demanded "minimum environmental sustainability standards" for crypto assets traded in the bloc.

The rule change would have meant proof-of-work crypto assets, such as bitcoin and ethereum, would likely be unable to demonstrate their alignment, given the ever-increasing computing power required to validate each transaction on the blockchain.

Formal negotiations on the draft framework will now proceed between the European commission, council and parliament.

Bitcoin was flat at $38, 769 at last check, according to CoinGecko.

"Todays MiCA vote is more than a win for crypto," Diogo Monica, co-founder and president ofAnchorage Digital,a digital asset platform, tweeted. "Its a win for the European economy and for innovation."

Monica added that "its a relief that a single misguided (but well-intentioned) provision wont derail the continents immense progress and potential. Sanityand logicprevailed."

A 2021 report from Bank of America noted that the CO2 emissions required to "mine" each transaction are at similar levels to that of Greece, a top fifty global economy, at around 60 tons, adding that an inflow of $1 billion in new bitcoin investment is the equivalent of 1.2 million internal combustion engine cars.

"Major Update on #MICA," Blockchain for Europe tweeted. "The #PoW ban has been rejected in the@Europarl_EN!!! Thank you on behalf of the industry!"

"Thats like thanking them for air," one person responded."

Patrick Hansen, head of strategy and business development with Unstoppable Finance, said that he was "more than relieved that the ECON committee voted against the ban of proof-of-work-based assets for EU companies in the end."

Scroll to Continue

"That amendment would have had dramatic consequences on the European crypto market," he said, "since it would have pushed EU consumers towards foreign, unregulated exchanges and European companies, capital, and talent out of the EU. All without a noticeable benefit to the stated goal of sustainability."

Hansen noted thateven if, in all likelihood, that amendment would not have found its way into the final agreement, "the mere symbol of the EU Parliament calling for a POW-ban would have already had a very detrimental effect on the market."

Hansen added that he glad that the majority voted in favor of the alternative amendment of rapporteur Stefan Berger, a member of the European Parliament.

"Including mining into the EU sustainability taxonomy is the better solution for addressing sustainability concerns and will hopefully contribute to more and more mining activities being carried out through a renewable-only energy mix," Hansen said.

Berger tweeted that the EU Parliament "has paved the way for innovation-friendly crypto regulation that can set standards worldwide."

"The process is not over yet," he said in German. "Steps lie ahead of us."

Alex Lemberg, CEO of Nimbus Platformsaid that "Proof of Work does have a major drain on energy, there can be no argument there."

"I look at this effort in a positive light and will leave final commentary for when the language is clearer," he said. "The alternative which has been implemented in certain regions simply called for banning of mining and that too proved to be fruitless as bans are almost always removed without any sustainable measures being implemented."

Lemberg added that "governing bodies on a global scale are beginning to understand that the crypto markets arent going away."

"The adoption of Bitcoin is at a level where having a viable replacement is very unlikely in the coming few years," he said. "Therefore an amicable and structured approach in dealing with Proof of Work has to be reached. I do believe, however, that Proof of Stake or similar will eventually become the method used across the board."

Austin Reid, chief of staff of FalconX, said "we're glad to see the European Union take steps to foster digital asset innovation."

"There are important conversations to be had on lowering the energy consumption from Proof of Work mining, but outright bans are counterproductive due to the risk they pose in pushing mining activities to regions with less rules and dirtier energy sources," he said.

Citing the White House's recent executive order, Reid added, "these decisions highlight widespread interest in digital assets, and the increasing competition among regions to maintain competitiveness on a global scale.

Originally posted here:
The European Union Delivers Great News to Crypto Fans and Investors - TheStreet