Bitcoin May Effectively Be Banned In Europe As EU Set To Finalize Regulatory Framework For Crypto

A European parliamentary committee is slated to hold a vote on the final version of the draft on Cryptocurrency assets on Monday. 

According to the draft for the new law, crypto-assets issued and/or traded in the EU “shall be subject to minimum environmental sustainability standards and set up and maintain a phased rollout plan to ensure compliance” with those requirements. 

In late February, another draft intended to ban Bitcoin BTC/USD within the EU by 2025 was introduced, however, it received strong flack within the community forcing EU lawmakers to back down from their plan to impose a ban on the apex crypto. 

Also Read: Is Bitcoin Hitting $100,000 By 2023? Here's What Over 60% Say

The reference to minimum sustainability as well as rollout requirements appear to be last-minute changes introduced to ban the use of digital currencies working on a “proof-of-work” consensus mechanism. Jeremy Allaire, Co-Founder, Chairman and CEO of Circle, was among the industry leaders responding with alarm to the proposal.

Extremely high stakes vote in the EU. That such a proposal made it this far is extraordinarily concerning and unlikely to stand up to practical reality. https://t.co/t8xA0EnVfE

— Jeremy Allaire (@jerallaire) March 12, 2022

Proof-of-work is the consensus mechanisms governing the Bitcoin blockchain.

For cryptocurrencies like Bitcoin and Ethereum ETH/USD, that are already trading in the EU, the rule proposes a phase-out plan to shift their consensus mechanism from proof-of-work to less energy-intensive methods, like proof-of-stake.

The proposed regulations, known as the Markets in Crypto Assets (MiCA), have the potential to channel cryptocurrency adoption in Europe. 

The draft would also require the European Central Bank to "establish uniform rules for crypto-asset service providers and issuers at EU level."

Photo: Courtesy of Jernej Furman on Flickr