European Parliament postpones vote on crypto law over proof-of-work

The Parliament of the European Union postpones the vote on a framework to regulate cryptocurrencies due to concerns about proof-of-work mining.

In a Twitter thread from Friday, Stefan Berger, Member of the European Parliament’s Economics Committee said the government agency had canceled a vote on the Markets in Crypto Assets, or MiCA, framework scheduled for Monday. Berger said parliament should “clarify the issue of proof-of-work” in discussions with stakeholders to ensure a proper legal framework, adding that some could misinterpret the proposal as a crypto ban.

“The discussion of MiCA indicates that individual passages of the draft report may be misinterpreted and understood as a [proof-of-work] ban,” Berger said. “It would be fatal if the EU Parliament sends the wrong signal with one vote under these circumstances.”

The MiCA, first introduced to the European Commission in September 2020 and approved by the European Council in November 2021, focused “to create a regulatory framework for the crypto-asset market that supports innovation and leverages the potential of crypto-assets in a way that preserves financial stability and protects investors.” As rapporteur for that vote – the person appointed to report on the proceedings – Berger said he had canceled the vote and had not indicated when it could be rescheduled.

Related: How Should DeFi Be Regulated? A European approach to decentralization

The urge for clarification may have been: requested by reports that a leaked draft from the MiCA suggested banning the use of cryptocurrencies in the EU due to their use of energy. If passed, the regulatory proposal would replace all current national crypto frameworks for EU member states without the need to reform the laws one by one, potentially leading to a ban on proof-of-work mining.

Many lawmakers and regulators in the EU have called for a ban on proof-of-work mining as the crypto space grows and the impacts of climate change become more visible. A Swedish financial watchdog and the Swedish Environmental Protection Agency called for a ban on proof-of-work mining in November, a move that has been criticized by some industry leaders.

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