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Why the European Union voted against the de facto ban on Bitcoin mining

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The European Union has voted against a de facto ban on Bitcoin mining. In a major event for the entire crypto industry, the coalition European Parliament’s Economic and Monetary Affairs Committee (ECON) rejected a proposal that would have banned proof of work for crypto assets. meet “minimum environmental sustainability”.

Related Reading | Is this a proposal to encourage green bitcoin mining or a marketing ploy?

As reported by Patrick Hansen, Developer at Unstoppable Finance, 32 Members of the European Parliament (MEPs) voted against this de facto ban on Bitcoin mining, opposing 24 of their colleagues. In a voting process that attempts to define European Crypto-Asset Markets Regulation (MICA), the crypto industry could have scored a big win in Europe.

MEPs voted in favor of an alternative amendment, as Hansen said, presented by Stefan Berger, a German economist and member of the Christian Democratic Union (CDU) in the European Parliament. Thus, Bitcoin and cryptocurrency mining will be part of a classification system that establishes which technologies meet environmentally sustainable status.

Called EU Taxonomy, this seems to be a better alternative for BTC mining. Still, crypto-related activity could be classified as unsustainable. This could create a negative impact on the industry, but less significant than a total ban. Hansen Explain:

If POW were to be deemed unsustainable according to the taxonomy (most likely), mining companies would have a much harder time getting money from European investors, corporations and governments who have to allocate more and more of their capital to green goals.

However, crypto-based businesses, such as exchanges and custodial services, Hansen said, would not be affected.

European laws that will attempt to clarify cryptocurrency regulations, also known as MiCA, will enter a period of negotiations. Once all parties agree, the bill will become law but, as Hansen said, businesses and individuals will have six months to adjust to the new regulations.

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Bitcoin Mining in Europe, a ban still possible?

The European Bitcoin mining sector, probably the largest and most affected by a possible ban, could still be impacted. Hansen explained that critics could try to veto MiCA’s current draft, which excluded crypto mining, and potentially send it to the main house of parliament.

It could bring more months of uncertainty for the sector as MPs discuss it. Hansen considers this process ineffective because it would delay cryptocurrency regulations. He added:

So there is still a lot of work to do in the months and years to come. But today is a big political success for crypto in the EU.

A separate report by Peter Slagter, author of Ons geld is stuk, claims that the recent PoW voted in the European Parliament was driven by environmental groups. These entities want to “overregulate” Bitcoin mining because they consider its energy consumption excessive.

As Slagter explains, the BTC mining industry is leaning towards greener and more sustainable sources of energy with much lower consumption than the steel, cement, copper, chemicals, air conditioners and driers industry. other devices in the United States only. Slâtre noted:

PoW is the essence of bitcoin. It allows for the existence of decentralized digital ownership. It enables digital scarcity. It allows digital objects – money, for example – to have physical properties. Ban PoW and you will disable one of the greatest computing inventions of decades.

Energy consumption of BTC compared to other industries/devices. Source: Peter Slagter on Twitter

Related Reading | New York’s Bitcoin Mining Moratorium Bill Receives Huge Recognition

At the time of writing, the price of BTC is trading at $38,900 with a sideways move on the last day.

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BTC moving sideways on the 4-hour chart. Source: BTCUSD Tradingview