After some turbulent back-and-forth, the EU is moving forward with its Markets in Crypto Assets (MiCA) bill. The landmark legislation will go ahead without the inclusion of a controversial provision that would have restricted proof-of-work cryptocurrencies.
Proof-of-work (PoW) is a decentralized consensus mechanism used by cryptocurrencies like Bitcoin and Ethereum, which requires the solving of a mathematical puzzle. The arbitrary nature of the puzzle prevents anyone from taking advantage of the system.
PoW is widely used for validating transactions and mining new tokens, in a computing process which consumes significant energy. The controversial provisions were born in one wing of EU legislators who feared the technology would be too “energy intensive.”
The measures, if passed, would have cut the EU off from the world’s most important cryptocurrencies like Bitcoin and Ethereum. Paris Member of Parliament Pierre Person called the idea “deadly regulation,” saying that the proposal was no longer conducive to the potential innovation and economic boom that blockchain technology offers.
Instead, the new language included in the bill states that crypto assets “shall be subject to minimum environmental sustainability standards.”
Earlier this month, the measures were defeated in a close vote of 32 against and 24 in favor of the ban. Stefan Berger, the parliamentarian overseeing the MiCA framework, had warned that anti-PoW legislators might make one more attempt to reinstate the provisions; now that the deadline has passed, European miners and crypto-holders can rest easy.