The European Union Parliament was initiating a proposal for the ban of bitcoin. However, this did not go into effect. Six committee members ruled against this ban. The proposal introduced to the draft last week aimed to limit the usage of cryptocurrencies powered by an energy-intensive computing technique. This is commonly known as proof-of-work. Several crypto supporters worldwide reacted strongly to this proposal.
Yesterday in a report on Coin Desk, they explained that many might reject these regulations. Being that in order for it to be put into action, all cryptocurrencies were to be subject to the following. “Minimum environmental sustainability standards with respect to their consensus mechanism.”
Bitcoin, Ethereum, and the Proposal:
Regarding Bitcoin and Ethereum, which people have been trading the EU up until now, something would have to change. The European Union proposal would change proof of work to proof of stake, which will consume less energy. While Ethereum is supposedly switching to proof of stake in the coming year, bitcoin is not as of now
A small percent of the monetary committee voted in favor of a compromise that asked the European Union’s executive arm in charge of the rule proposal to suggest an alternative. They said, “By January 2025, the Commission shall present to the European Parliament and the Council, as appropriate, a legislative proposal to amend Regulation (EU) 2020/852, in accordance with Article 10 of that Regulation, with a view to including in the EU sustainable finance taxonomy any crypto-asset mining activities that contribute sustainability to climate change mitigation and adaption.”
The proof of work system has concerned many experts and politicians worldwide because it consumes a lot of energy. Some European Union politicians (aside from the proposal) are concerned that renewable energy may support cryptocurrencies such as bitcoin rather than for national purposes.
Following the European Union proposal that took place in parliament. The MiCA draft will go to a “trilogue,” a formal round of discussions involving the European Commission, Council, and Parliament.