Editor’s note: This article and its headline were updated on March 15 to correct that the European Union did in fact pass MiCA. Provisions within MiCA that would have impacted proof-of-work cryptocurrencies did not pass.
This morning, the crypto investing world has been awash with nerves. The European Union has been putting together a sizable crypto bill — one which could see sweeping regulations of the digital money industry implemented across much of Western Europe. Some provisions to the bill have come under fire recently for their controversial take on certain assets. But fear not, investors, the EU crypto vote is in, and it looks like a win for digital assets.
There’s been plenty of chatter today surrounding the EU’s Markets in Crypto Assets (MiCA) proposal. The proposal seeks to be the structure underlying formal crypto policy in EU states. The bill has been back and forth among members of the parliamentary body since its first iteration in 2018; members are split on the terms by which the bill is instituted and the reach of regulations.
While members are still clashing over the specific vision for digital money, the MiCA bill is seeing significant attention today. That’s because EU members joined together this morning to vote on the future of the bill in its current iteration; were it to pass, it would spell disaster for some of the biggest cryptos in the world.
EU Crypto Vote Rejects MiCA Bill’s Proof-of-Work Ban
MiCA has been hugely controversial in recent weeks among cryptocurrency enthusiasts. As policymakers drafted up the proposal, some last-minute additions would have huge implications for the ability to trade certain coins. One measure in particular would block key services for proof-of-work cryptos within the EU.
Today, the EU crypto vote is wrapping up, and investors have plenty of reason to celebrate. As it turns out, members of the governing body are not comfortable moving forward with some of the most controversial parts of the bill.
The MiCA vote is in, and EU members did in fact approve the broad terms of the bill; the EU’s press release confirms that MiCA passed with 31 votes for it, four abstentions and 24 votes against it. However, these lawmakers stood up against the proof-of-work ban by voting down the controversial amendment. In total, 32 members voted against MiCA, while 24 voted in favor of it.
Why Does a Proof-of-Work Ban Matter?
Proof of work, an energy-intensive consensus mechanism, is highly controversial among environmental activists. As the industry continues to come under scrutiny for its energy consumption, proof-of-work cryptocurrencies are largely to blame. As such, environmentally focused EU representatives have kept proof-of-work cryptos within their crosshairs. However, PoW also underlies the largest two projects in the world — Bitcoin (BTC-USD) and Ethereum (ETH-USD) — among others.
It seemed last week as though EU members would take the proposal to vote without this controversial measure. When today’s vote was first announced, representatives said the bill would be stripped of the provision. As it turns out, though, members quickly reintroduced the measures this morning ahead of the vote.
By barring these cryptos entirely, the EU would cut off a significant group of investors from the largest coins in the world. Investors are celebrating the result of the vote as a step in the right direction for crypto legislation.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.