The European Union’s Economic Committee on Monday voted against closely-watched legislation that sought to ban proof-of-work (PoW) tokens in a proposed bill on crypto regulation in the bloc.
Citing sources in the Economic Committee (ECON), Patrick Hansen of Unstoppable Finance said the ECON committee had voted in a 32-24 ratio against a proposal in the Markets in Crypto Assets (MiCA) bill that sought to ban PoW tokens such as Bitcoin and Ethereum.
MiCA rapporteur Stefan Berger also confirmed Hansen’s report, calling the vote a first-stage win for MiCA.
By accepting my proposal, members have paved the way for future-oriented crypto regulation. It is now a matter of accepting the report as a whole in the final vote & sending out a strong signal for innovation.
-Berger said in a tweet
Now, an amendment which seeks to categorize crypto as a sustainable financial investment, will be considered. While the vote is not the final hurdle faced by MiCA before its passing, it comes as a source of relief for traders fearing a crypto crackdown in the EU.
The environmental impact of PoW mining will also be considered by a different governmental body.
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.
— Patrick Hansen (@paddi_hansen) March 14, 2022
PoW ban widely condemned
The ECON was initially set to vote on MiCA in February. But the vote was postponed after heavy backlash from the crypto community over the PoW ban.
While Berger had assured the public that the PoW discussion would be dropped from MiCA, it was added back into a proposed draft ahead of the vote on Monday. The environmental impact of PoW mining is the main point of contention over the bill, given the high energy cost of crypto mining.
But these concerns have been rendered moot by crypto miners switching to renewable/carbon neutral energy sources. Advances in chipmaking also seek to reduce the energy cost of mining.
The EU’s lenient stand on crypto mirrors a similarly positive tone struck by U.S. President Joe Biden last week, where he signed an executive order for developing crypto technology in the country.
EU lawmakers have attempted to fast-track crypto regulation, citing potential misuse by entities facing economic sanctions. An anti-money laundering act that incorporates crypto is also in the works.
Bitcoin and Ethereum prices rose slightly after the news, indicating a positive reaction from the market.