Members of the Economic and Monetary Affairs Committee of the European Parliament voted against a bill on Monday that could have banned proof-of-work cryptocurrencies like Bitcoin and Ethereum.
The Markets in Crypto Assets (MiCA) bill, which was introduced in 2020 as part of the European Commission's Digital Finance strategy, aims to tighten regulation around crypto assets by establishing uniform licensing requirements across the EU.
There are 126 articles in the regulatory framework, and details of their implementation are provided by each state.
There was a version of the draft bill that was subject to a vote that contained language outlawing proof-of-work blockchains.
All crypto providers will be required to submit a detailed plan of how they will comply with environmental sustainability standards as part of their application for operation.
One downside of this approach is the lack of a central operator in decentralized blockchains like Bitcoin.
In light of this, Stefan Berger, a member of the European Parliament from Germany, proposed a more crypto-friendly version last week in response to a public outcry. According to him, "MiCA no longer plans to discuss the Proof-of-Work independently."
Despite the fact that the original draft was put to a vote, it did not receive the support of a majority of lawmakers.
According to Patrick Hansen, head of strategy of crypto firm Unstoppable Finance, the restrictive version was opposed by 32 members of the committee, and was backed by just 24 members. The more moderate version has been forwarded to other EU institutions.
The energy consumption of Bitcoin has always been a source of controversy for environmentalists. It was reported in May 2021 that Tesla had stopped supporting Bitcoin payments due to energy concerns.