Update: After the voting, the price of BTC was largely unaffected as majority of EU lawmakers rejected the plan to ban Bitcoin and other proof-of-work consensus protocol coins. This was reported by Coindesk.
A legislative draft on cryptocurrencies that the European parliament voted on today, Monday, March 14, may have a negative impact on the cryptocurrency market, says industry experts. The draft which is commonly known as MiCA or the Market in Crypto Assets seeks to streamline the guideline on crypto assets use in the EU.
As reported by Bloomberg, if passed as a bill it would have an adverse effect on cryptocurrency space with its opposition to proof-of-work consensus protocol coins. With some of the most capitalized coins using the PoW consensus, the bill would effectively ban the use of Bitcoin and Ethereum in the EU region.
The Economic and Monetary Affairs Committee of the European parliament that voted on the legislative draft was guided by MiCA’s objective of maintenance of minimum environmental sustainability, which is another way of saying that those cryptocurrencies that are energy intensive will not be supported for mining, trading and investing within the EU.
Curbing The Growth of Bitcoin
Analysts say that the last minute introduction of the minimum sustainability clause in the MiCA draft was an intentional move by policy makers to curb the use of PoW consensus coins such as BTC and ETH.
In his reaction to the proposed bill, Jean-Marie Mognetti, co-founder and CEO of CoinSharesCo termed the move. “more than just bad news”.
According to him,
“The proposal to ban PoW protocols like #Bitcoin and in the #MiCA bill is more than just bad news. It is a thoughtless, uninspired proposal that does not reflect the realities and the future of the industry.”
The reason why industry experts are concerned about the harsher draft is that it effectively could herald a ban on the most capitalized coins.
Protecting Legacy Currencies, Stifling Innovation
The review by the EU parliamentary committee has been described as a direct attack on Bitcoin, since the digital asset is not centrally controlled and therefore, incapable of implementing a roll-out plan that ensures a migration to a less energy intensive consensus protocol. This is the view of Unstoppable Finance’s head of strategy, Patrick Hansen.
Darin Feinstein, the founder of Corescientific said that the move by the parliamentary committee against PoW coins is an indication that the government is protecting legacy dynasties at the expense of innovation. This, according to him, is a move against personal liberty and tends towards totalitarianism.
In a Twitter post, he wrote:
“The EU PoW ban protects legacy dynasties at the expense of innovation, individual liberty and is a move toward totalitarianism (#CBDC)”