The European Parliament’s Committee on Economic and Monetary Affairs has voted against a bill that would outright ban proof-of-work (PoW) cryptocurrencies such as Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH).
What Happened: On Monday, 30 members of parliament voted against a Markets in Crypto Assets (MiCA) bill amendment seeking to ban PoW cryptocurrencies within the European Union.
A total of 23 members of parliament voted in favor of the ban, while 6 abstained from voting.
The majority of those who voted for the ban were from the Green faction and the Progressive Alliance of Socialists and Democrats (S&D).
The S&D Group said the outcome was a result of conservatives “with far-right support” blocking their push to cut the carbon footprint of cryptocurrencies.
Why It Matters: PoW is the consensus mechanism through which Bitcoin and several other cryptocurrencies are mined into existence. The process requires a significant amount of computing power, leading critics to point to a negative impact on the environment.
The result of the vote means that cryptocurrency mining is likely to no longer be addressed within MiCA regulation, but added to EU sustainable finance taxonomy, said Unstoppable DeFi founder Patrick Hansen.
4/ MiCA regulates financial instruments and financial service providers. It makes way more sense to address any concerns around the sustainability of mining technology separately.
Whats next?
— Patrick Hansen (@paddi_hansen) March 14, 2022
Now that a ban on PoW cryptocurrency has been ruled out, the MiCA draft regulation will make its way through the EU institutions that will finalize a legislative framework for cryptocurrency.
Price Action: At press time, Bitcoin was trading at $39,000, gaining 2.16% in the last 24 hours. Ethereum was trading at $2,546, up 0.82% over the same period.