Bitcoin’s Proof-of-Work (PoW) will no longer be limited in the European Union

The European Union (EU) has dropped its plans to impose a de-facto ban on Bitcoin mining and related activities that could allegedly hurt the region’s efforts to promote sustainable technologies.

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BTC/USD 4-hour chart | Source: TradingView

Returned ‘proof-of-work ban’ in EU crypto markets bill fails in committee

The usage of Proof-of-Work (PoW) cryptocurrencies was in doubt following the draft of the European Union’s (EU) proposed legal framework for managing virtual currencies, known as the Markets in Crypto Assets (MiCA) framework.

However, on Monday, March 14, the European Parliament Committee on Economic and Monetary decided to vote against the ban on the basic Proof-of-Work (PoW) mechanism for types of popular cryptocurrencies like Bitcoin and Ethereum. Indeed, the provision that could force PoW cryptocurrencies to switch to more eco-friendly mechanisms did not receive the necessary votes in parliament.

It’s important to note that Proof-of-Work is different from Proof-of-Stake (PoS). In the case of cryptocurrencies like Bitcoin and Ethereum, PoW is the consensus mechanism underlying digital assets that require a lot of energy to operate.

As a result, the calculation process has come under intense scrutiny from lawmakers in the European Union over concerns about energy use. As Bitcoin’s popularity grows, so does the controversy over its energy consumption and environmental impact.

Even though according to the latest report, BTC accounted for just 0.08% of the world’s carbon dioxide (CO2) emissions in 2021, suggesting that comments critical of the network’s electricity usage seem to have been inflated.

An earlier draft of the MiCA framework contained a section explicitly and unequivocally advocating for the restriction of cryptocurrency services based on ecologically unsustainable consensus techniques beginning in January 2025, with the ban effective immediately. However, the provision was eventually rescinded due to widespread industry opposition.

Dr. Stefan Berger, an EU parliamentarian in charge of the MiCA legislative framework at the time, said that the problematic paragraph had been withdrawn but that a final decision had not yet been reached.

However, the new draft contains a similar proposal to the previous one stating that crypto-assets “shall be subject to minimum environmental sustainability standards concerning their consensus mechanism used for validating transactions,” which refers to cryptocurrencies that use Proof of Work as a consensus mechanism to confirm transactions.

In addition, expensive cryptocurrencies will be required to “set up and maintain a phased rollout plan to ensure compliance with such requirements.” Since Bitcoin cannot complete the conversion, this law will directly affect it if the EU does not vote against it.

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