Ethereum

Bitcoin and Ethereum price in jeopardy as European Union plans to limit cryptocurrency

Bitcoin and Ethereum price in jeopardy as European Union plans to limit cryptocurrency

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The cryptocurrency could soon take another punch as the European Union is seriously considering some sort of blockchain ban. Photo/Getty Images

The cryptocurrency may soon take another punch as the European Union seriously considers banning digital assets.

Blockchain investors are eagerly awaiting the outcome of a vote in the European Parliament that will determine the future of cryptocurrency on the continent.

The parliamentary vote will take place on Monday local time, which is later in the day for those in the Australian and New Zealand time zones.

Members of the EU’s Economic and Monetary Affairs Committee are due to vote on a proposed draft framework for crypto-asset markets (MiCA).

If the proposal goes ahead, it could be bad news for cryptocurrency investors.

An eleventh-hour addition to the framework calls for a limit on the use of cryptocurrency, including the “phasing out” of preexisting tokens like bitcoin and ethereum that are already traded in European countries.

And it looks like the result is too close to announce, with insiders predicting the vote could be beaten by a slim majority, CoinDesk reported.

Environmental concerns at the center of the proposal
In recent weeks, concerns have been raised that Russia is circumventing economic sanctions imposed on it over its invasion of Ukraine by using cryptocurrency to protect wealth and trade.

Some, including Ukrainian Deputy Prime Minister Mykhailo Fedorov, have called for cryptocurrency exchanges to ban all Russian transactions.

However, the EU cites environmental concerns as its main reason for cracking down on cryptocurrency in the sweeping proposal.

Last week, US President Joe Biden signed a historic executive order on cryptocurrency.  Photo/Getty Images
Last week, US President Joe Biden signed a historic executive order on cryptocurrency. Photo/Getty Images

The project aims to limit the use of cryptocurrencies due to its high power consumption.

In fact, the process of creating bitcoins to spend or trade consumes 91 terawatt hours of electricity per year, which is more than a small country, like Finland, uses in an entire year.

The late amendment was added to the proposal because bitcoin’s excessive carbon footprint could breach rules surrounding EU environmental standards.

Cryptocurrencies must meet “minimum standards of environmental sustainability in relation to their consensus mechanism used to validate transactions, before they are issued, offered or admitted to trading in the Union,” reads a statement. draft proposal previewed by CoinDesk.

A crypto pro said the move was “extraordinarily concerning” and the vote later today was incredibly important.

Jeremy Allaire, founder of Circle Pay, wrote online: “Extremely high stakes voting in the EU.

“That such a proposal has come this far is extremely concerning and unlikely to stand up to practical reality.”

A total or partial ban on cryptocurrency is not completely unheard of.

In January, Russia indicated that it was considering a complete ban on digital assets due to money laundering and environmental concerns.

China went further and completely banned everything related to crypto at the end of September last year as part of a major tech crackdown.

Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, and Bangladesh have also banned cryptocurrency.

In November, Indonesia banned cryptocurrency for its entire Muslim population because it contained “elements of betting”.

Crypto enthusiasts have already dodged a bullet last week when it comes to the government crackdown on digital assets.

Last week, US President Joe Biden signed a historic executive order on cryptocurrency.

People feared he was seeking to ban digital assets amid rumors that Russians were evading economic sanctions by trading cryptocurrency.

However, after the executive order was announced, the price of bitcoin actually jumped 10%, supported by the general consensus that the changes were positive.