EU Proposal to Ban Crypto Mining Fails Vote

The European Union rejected a proposal that would have banned mining of energy-intensive cryptocurrencies such as Bitcoin, as the bloc passes new regulations for the digital assets sector.

The EU’s Economic and Monetary Affairs Committee passed a final draft of the Markets in Crypto-assets (MiCA) legislation on Monday, a regulatory bill for cryptocurrencies which included a clause that would ban proof-of-work (PoW) in the region.

Bitcoin and Ethereum undergo a PoW process to mint tokens and record transactions. The process, which consumes massive amounts of energy, has been banned in some countries, such as China when it struggled with power cuts last year.

The provision would have effectively banned PoW cryptocurrencies, although it promised to give time for such tokens to improve their carbon footprint.

The clause was dropped with 23 votes in favor, 30 against and six abstentions.

Instead, cryptocurrency was added to the EU’s taxonomy for sustainable finance, which would define whether a digital asset adhered to green standards.

MiCA is now waiting for approval of the EU’s executive arm and member states before becoming a law.

While several EU lawmakers have pushed for the proposal in favor of sustainable energy, some had raised concerns that such ban would mean that more renewable energy would be transferred to crypto mining instead of being available for public use.

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