The plans for a ban on the cryptocurrency Bitcoin in the European Parliament are off the table for the time being.
In the final draft of the guidelines for the provision of crypto services (MiCA), there is no longer a passage that would have meant an “end” for Bitcoin in Europe.
The report was handed over to the responsible committee for economics and currency (ECON) on Monday by the rapporteur Stefan Berger (CDU). The ECON committee will vote on this in a week (March 14, 2022).
In an earlier version of the report, a ban on crypto services based on “environmentally unsustainable consensus mechanisms” was demanded at the urging of Green, Social Democrat and Left MPs. This would have meant de facto a ban on the energy-hungry consensus and protection procedure “Proof of Work”, in which very complex calculation tasks have to be solved.
In the case of cryptocurrencies, the consensus mechanism is the process used to ensure that all participants have a uniform data status in the blockchain. The blockchain is a decentralized, digital data register.
The large amount of energy required for these calculations triggered a heated debate about the sustainability of cryptocurrencies years ago. The higher the Bitcoin price rises, the more so-called Bitcoin miners compete to mine new coins. This increases the complexity of the computing tasks and thus the energy consumption.
Cryptocurrencies a climate killer?
According to calculations by Mike Berners-Lee, Professor at the Institute for Social Futures at Lancaster University, all cryptocurrencies caused around 68 million tons of CO2 emissions in 2019 alone. In just ten years, cryptocurrencies would have already left 0.12 percent of the entire world’s carbon footprint.
Committee rapporteur Berger told the German Press Agency that in view of the important debate about sustainability, he had proposed including crypto assets, like all other financial products, in the taxonomy. “An independent discussion of the Proof-of-Work is no longer planned in the MiCA.” With the rules of the taxonomy, the EU Commission defines standards for sustainable management. This is intended to direct public and private financial flows into sustainable investments.
With the MiCA directive, the EU can set global standards, emphasized Berger. “Therefore, all those involved are now invited to support the submitted draft and to vote for the MiCA. Strong support for MiCA is a strong signal from the EU Parliament for a technology-neutral and innovation-friendly financial sector.» (dpa)