EU parliament prepares virtual currencies vote

What

The European parliament is set to vote on virtual currencies today

Why

The outcome of the vote will decide the legislative framework for governing virtual currencies, markets in crypto assets

What next

The vote could see limitations put proof-of-work crypto in Europe

The story

Today, EU lawmakers will vote on Markets in Crypto Assets (MiCA), after a fresh draft of legislation was released on Friday.

The previous draft of Markets in Crypto Assets (MiCA) contained wording that prohibits crypto services that rely on environmentally unsustainable consensus mechanisms like proof-of-work (PoW) starting in 2025. Despite this paragraph being removed from the original draft, a final decision is yet to be made.

According to a report by Frankfurt School last November, as of August 2021, the Bitcoin network annually required 90.86 Terawatt hours (Tw/H) of energy. This converts to about 0.05% of total global consumption, and around only 0.08% of the total global carbon emissions.

French member of parliament Pierre Person has been critical of the legislation, and said that a prohibition on PoW crypto could drive away talent and innovation from Europe. In a tweet, Person said by banning Bitcoin and Ethereum, and “complicating the use of NFT and DeFi, the European Parliament is mortgaging our monetary and financial sovereignty.”

Should the bill be passed in its current state, it wouldn’t have a major impact on Ethereum, as the network is expected to complete its transition to Ethereum 2.0 and utilise a proof-of-stake consensus mechanism.

For more information about Bitcoin and Ethereum, visit our learning portal here.

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