- The EU Economic Committee voted against the POW crypto ban in MiCA.
- PoW cryptos are now expected to be regulated by the EU Sustainable Finance Taxonomy.
- While the fight is not over, the vote today is a regulatory win for Bitcoin.
The Economic Committee of the EU has voted against the MiCA provision to effectively ban Proof-of-Work (PoW) crypto. During the weekend, it was feared that the provision would pass as it appeared to have majority support.
Crypto Lives To Fight Another Day In Europe
In what will be seen as a great regulatory victory for Bitcoin, members of the European Parliament voted against the MiCA provision. The vote was split 32 to 24, 32 against, and 24 for the provision.
The European People’s Party, the European Conservative Party, and the Renew movement were amongst those with a majority of parliamentarians who opposed the provision. In the end, their votes would trump those of the green and regionalist parties, the socialists and democrats, and the green left-wing parties.
As a result of this decision, Bitcoin mining would no longer be regulated by MiCA but by the EU Sustainable Finance Taxonomy. Patrick Hansen, a RegTrax contributor for the European Union, explained that the “EU taxonomy is a classification system, establishing a list of environmentally (un)sustainable economic activities. It provides companies, investors, & policymakers with definitions for which economic activities can be considered sustainable.”
He believes that Bitcoin mining is most likely going to be seen as unsustainable under the classification. As such, he expects that “mining companies would have a much harder time getting money from European investors, companies, and governments that have to allocate more and more of their capital towards green objectives.”
In this sense, unlike the previous bill, exchanges and other crypto-service businesses will not be barred from offering Bitcoin services in the region. He tweeted, “This is a huge improvement compared to the prior compromise draft (POW-ban).” Hansen expects that after the MiCA draft goes through the European Commission, Parliament, and Council in some months, it will be implemented, giving companies 6 months to become compliant.
Can PoW Crypto Still Be Banned In Europe?
Patrick Hansen notes that the parties to the ban still have an option open to them. He tweeted that “They could veto a fast-track procedure of MiCA through the trilogues & bring the discussion to the plenary of the Parliament. They need 1/10 of the votes of the EP to do so, which they have.”
Hansen noted that the outcomes of such an effort would be unpredictable and, as such, ” should be prevented.” He admits that the votes might not change, but it would “delay the regulation for at least a couple of months.”
Hansen revealed that the debate surrounding PoW crypto was far from over, as it would at least come up in the taxonomy. He noted that while there was still lots to do in the coming months and years, today, he said, “is a big political success for crypto in the EU.”