Plans to ban bitcoin in the EU parliament are off the table for the time being



In the final draft of the guidelines for the provision of cryptocurrency services (MiCA), a passage that would have meant a “way out” for bitcoin in Europe is no longer on the table.

The report was delivered on Monday to the Committee on Economic and Monetary Affairs (ECON) by rapporteur Stefan Berger (CDU). The ECON committee will vote on it in a week’s time (March 14, 2022).

An earlier version of the report called for a ban on cryptocurrency services based on “ecologically unsustainable consensus mechanisms”, at the urging of MEPs from the Greens, Social Democrats and the Left. This would have meant a de facto ban on the energy-intensive “proof of work” consensus and protection method, which involves solving very complex computational problems.

In cryptocurrencies, the consensus mechanism is the procedure used to ensure that all participants have a uniform data state on the blockchain. The blockchain is a decentralized digital data record.

The large amount of energy required for these calculations caused a heated debate about the sustainability of cryptocurrencies years ago. The more the price of Bitcoin rises, the more so-called Bitcoin miners compete to mine new coins. This increases the complexity of computing tasks and thus energy consumption.

Are cryptocurrencies a climate killer?
According to calculations by Mike Berners-Lee, professor at Lancaster University’s Institute for Social Futures, all cryptocurrencies caused CO2 emissions of about 68 million tons in 2019 alone. In just ten years, cryptocurrencies would have already left 0.12% of the entire world’s CO2 footprint.

Committee rapporteur Berger told Deutsche Presse-Agentur that, in view of the important sustainability debate, he had proposed including cryptoassets, like all other financial products, in the scope of the taxonomy. “An autonomous thematization of the proof of work in MiCA is no longer envisaged.” With the taxonomy framework, the European Commission sets standards for sustainable businesses. This is intended to channel public and private financial flows into sustainable investments.

With the MiCA Directive, the EU can set global standards, Berger stressed. “Therefore, all stakeholders are now invited to support the submitted draft and to vote in favor of MiCA. Strong support for MiCA is a strong signal from the EU Parliament in favor of a technology-neutral and innovation-friendly financial sector.”

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