HomeNewsEU Revises Legislation Targeting Proof-of-Work Crypto Mining

EU Revises Legislation Targeting Proof-of-Work Crypto Mining

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EU Revises Legislation Targeting Proof-of-Work Crypto Mining

Key Takeaways

  • European legislation that proposes restrictions on environmentally unsustainable consensus mechanisms has been revised.
  • That legislation would possibly well perchance maintain conceivably restricted using Bitcoin and varied mining-primarily based cryptocurrencies earlier than revision.
  • Stefan Berger, a member of the European Parliament, confirmed that the relevant text has been eradicated.

A share of European legislation has been revised to rob away language that proposed a ban on mining-primarily based cryptocurrencies.

MiCA Regulations Centered Crypto Mining

Language in a share of legislation that became as soon as interpreted as problematic for Bitcoin and varied Proof-of-Work cryptocurrencies has been eradicated.

The legislation in the request is Markets in Crypto-Resources (MiCA), which proposes rules spherical using cryptocurrencies. The legislation became as soon as first proposed by the European Charge in September 2020.

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The preliminary model of the legislation said that origin in 2025, cryptocurrencies created and admitted in the EU would possibly well perchance also merely peaceable “no longer be primarily based or count on environmentally unsustainable consensus mechanisms.” It also says that these mechanisms would possibly well perchance also merely peaceable “observe minimal environmental sustainability standards.”

That language would seemingly impose a Europe-wide ban on cryptocurrencies that count on Proof-of-Work or mining, an observation that is well known for its excessive energy demands.

Bitcoin, which uses over 170 terawatt-hours (TW/h) of energy per year, would presumably tumble below that rule.

Varied mining-primarily based blockchains and cryptocurrencies—in conjunction with Ethereum, Dogecoin, Litecoin, and Bitcoin Cash—would presumably tumble below the identical rule as properly, although these cryptocurrencies utilize critically less energy than Bitcoin itself.

Restrictive Rule Has Been Revised

Now, the guideline restricting ecologically intensive cryptocurrency mechanisms has now been eradicated from the legislation, per German-language crypto files plot BTC Echo.

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Stefan Berger, a member of the European Parliament, confirmed the revision:

“The paragraph will not be any longer any longer in the text. The sage has but to be voted on in committee. In this vote, we can then gawk the put the majorities lie. The option has no longer but been made.”

Berger also instructed The Block that the subsequent vote is determined to rob put between mid-March and early April. If authorized, the legislation will face further voting and debates earlier than it takes to finish.

No subject to the legislation’s apparent aim of restricting cryptocurrency utilization in the EU, it is unclear whether or no longer this would possibly well perchance also merely, in reality, be in a location to originate that aim. Most cryptocurrencies are designed to be transferred between survey wallets, a manner that governments can ultimately restrict exchanges, custodial wallets, and varied centralized products and companies.

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