The European Union will vote on Monday on a cryptocurrency framework proposal that could result in the banning of proof-of-work consensus assets. The high-stakes vote is too close to call, according to those with inside knowledge
The cryptocurrency market could face a drop in prices as the European Union is reportedly considering banning digital assets that use proof-of-work. Members of the EU will vote on a Markets in Crypto-Assets (MiCA) framework on March 14. The consensus among experts is that the outcome of the vote is too close to call,
Should the proposal succeed, it could lead to the phasing out of bitcoin, ethereum, and other crypto-assets into non-proof-of-work consensus mechanisms. The proposal would have an effect on all countries that are a member of the EU. The particular statement in the proposal that calls for the phasing out of current assets was added at the last minute.
The major motivating factors behind the new addition are the circumvention of economic sanctions and environmental concerns. Lawmakers are expressing some worry about Russia avoiding the full impact of economic sanctions for its attacks on Ukraine through cryptocurrencies.
But it appears that the environmental impact of cryptocurrency mining is the biggest concern, and the EU did specifically say so. The last-minute change was made because there is some belief that bitcoin’s carbon footprint breaks the EU’s environmental standards.
CoinDesk reported that it had seen a copy of the proposal and that it would require crypto assets to follow,
“minimum environmental sustainability standards with respect to their consensus mechanism used for validating transactions, before being issued, offered or admitted to trading in the Union.”
Crypto world criticizes proposal
The backlash from the crypto world came in quick and harsh following the announcement of the proposal. Circle CEO Jeremy Allaire said that the vote was an extremely high stake one, though he said it would be unlikely to stand up to practical reality.
Patrick Hansen from Unstoppable Finance also believes that the proposal is at its highest chance ever of passing.
The EU PoW ban protects legacy dynasties at the expense of innovation, individual liberty and is a move toward totalitarianism (#CBDC)#Bitcoin mining in the EU consumes .198% of EU energy generated annually – an inconsequential #— Darin Feinstein (@DarinFeinstein) March 12, 2022
Lesson: Single Issue Voters must protect #BTC pic.twitter.com/bKYYxlEgLc
Darin Feinstein of Core Scientific believes that if passed, the proposal would be a move towards totalitarianism. He pointed out that the EU bitcoin mining industry only consumes 0.198% of the EU’s total energy generation. He called for the voters to protect BTC.
Some people in the crypto world are not worried, however, for specifically what Feinstein says. They believe that the mining industry is so small that it would have little impact.