On Monday, the cryptocurrency industry had a major relief when the members of the European Parliament Committee voted against the MiCA (Markets in Crypto Assets) bill. The MiCA could have productively restricted the use of proof-of-work based cryptocurrency in the European Union region. The representatives of the crypto industry warned people about the situation where the hardened regulation can prove to be a threat for the whole crypto industry, but with the current result, people related to crypto have had a sigh of relief.
As part of the Digital Finance strategy, the draft of the MiCA bill was introduced in 2020 by the European Commission. This regulatory framework has 126 articles and detailed plans pertaining to the application by the European Commission and the member states.
The bill covers many crypto-related subjects, including the position of topmost cryptocurrencies and stablecoins. MiCA also has subjects related to cryptocurrency mining and exchange platforms with notable exceptions like CBDC (Central Bank Digital Currency), NFTs, Security tokens, Decentralized finance, etc.
In Monday’s parliamentary election, there was a significant difference between the two types of the same bill up for the voting. The first draft was directed to reject any kind of crypto operation and projects based on Proof-of-Work, PoW protocol, and the currency providers will have to submit detailed propositions of their agreement with the environmental sustainability standards.
But the problem is with Bitcoin (BTC) and some other decentralized coins these details cannot be provided because there aren’t any existing principal operators or controllers of these systems and cryptocurrencies. The previous draft was rectified to remove such a regulatory impasse. As suggested by Stefan Berger, a member of the European Parliament Committee on Economic and Monetary Affairs, the final draft wouldn’t have these problematic terms and sentences. Even though the hardline version of the MiCA bill appeared in the parliament, most of the MEPs did not support the bill. The result was 32-24, in favour of the first draft was 24 members and against the bill was 32 members of the ECON committee.
The moderated version of the MiCA bill does not have any implication or ban the PoW projects, and it will continue its journey through the European Union Institutions. The bill now directs the chief executive body of the EU, the European Commission, to come up with a legislative proposal that will include the EU sustainable finance taxonomy of any crypto-asset mining activities by Jan. 1, 2025.
The mining of crypto tokens and cryptocurrencies will still be recognized as an unfeasible activity before January 2025. Thus it will receive any support and investment from any European government and company. But the situation is far better than imposing an outright ban on crypto mining activities which might have dramatically changed the current crypto industry in Europe. The next step for the MiCA bill is to go through a three-way consideration from the European Commission, European Parliament and the Council of the European Union.