European Union Bans Proof-of-Work Crypto Assets Including Bitcoin, Here's Why

EU bans PoW-based cryptos like Bitcoin. (photo: Antara doc)

JAKARTA – Recently, the European Parliament (EP) discussed a proposal containing a potential ban on crypto-based proof-of-work mining. The move came after the emergence of a controversial provision that sparked objections from the crypto community.

The rules that prohibit PoW-based cryptos such as Bitcoin were later updated from the Markets in Crypto (MiCA) framework. Therefore, the European Parliament is encouraged to approve the latest proposals in February. However the vote was postponed to address concerns raised by representatives from the crypto industry.

“The Bitcoin ban in the EU is not in effect for now,” said BTC Echo, citing the document.

Reporting Bitcoin.com News, a German crypto news outlet revealed that a controversial paragraph regarding the ban on PoW-based cryptocurrencies has been dropped. However, the text proposed by the Left, Green and Social Democrats would prohibit companies from offering services for the acquisition, storage and trading of PoW-based crypto assets.

The already scheduled vote has been canceled at the request of Stefan Berger, rapporteur for the legislative package, who has now confirmed the BTC Echo in a tweet posted late Tuesday. He also told the public that negotiations had resumed.

"We now want MiCA to go through Parliament as quickly as possible," Berger stressed.

His remarks echoed calls issued by European Central Bank President Christine Lagarde, who last week urged the EU to urgently adopt the regulation to prevent Russia from using cryptocurrencies to evade sanctions imposed over its military invasion of Ukraine.

"Talks are going well," Berger said reassuringly. Berger is a member of the Committee on Economic and Monetary Affairs. Once the EP passes the regulatory package, its final adoption will depend on the outcome of the dialogue between Parliament, the European Commission and EU member states. The executive body in Brussels will then evaluate the implementation of the approved draft in the future.

In recent months, officials and regulators from several member states have called for a European Union-wide ban on mining using proof-of-work consensus algorithms. Sweden was one of the first to insist on the measure. They claim there has been an increase in the use of renewable energy in bitcoin mining at the expense of the climate in other sectors.