The tug-of-war over the proof-of-work ban has come to an end for the time being. With a slim majority, members of the EU Parliament vote against a “Bitcoin ban.” BTC-ECHO has received the votes. Consequently, 30 deputies voted against the project and 23 in favor. In addition, there were six abstentions. The MiCA draft is now in Parliament for the final vote.
The Green, Left and Social Democrat factions had previously called for a ban on the provision of crypto services based on “non-ecologically sustainable consensus mechanisms” in late February. The consequences were resistance from the crypto space, as well as from politics and business, so the chairman of the responsible committee (ECON), Stefan Berger, initially postponed the vote and later removed the entire ban paragraph.
Over the weekend, leftist factions made one last attempt to introduce a Bitcoin ban after all. As stated in the revised Article 2a application:
Crypto assets are subject to minimum environmental sustainability standards in relation to their consensus mechanism used to validate transactions before being issued, offered or admitted to trading in the Union.
These standards would have had to be defined by the EU Commission. However, this will no longer happen. Instead, the new draft provides for the inclusion of cryptocurrencies in the EU taxonomy. These are European Union guidelines that assess economic activities based on their sustainability.
How could Bitcoin continue
Now, a Bitcoin ban is off the table for the time being. If all goes well, the draft should be discussed in a tripartite dialogue between the Commission, Parliament and the member states. Once again, there is a clear majority opposed to a PoW ban, insiders tell BTC-ECHO. The Bitcoin ban factions were well aware of this.
However, proof-of-work cryptocurrencies are not entirely out of the woods yet. Because the Green, Left and Social Democratic groups could try to block the draft by forcing a vote in plenary. This would mean that the transfer to the trilogue would have to be postponed for several months. This gives parliamentary groups the opportunity to introduce new amendments and start discussions.
Consequently, the implementation schedule of the MiCA guidelines would also need to be adjusted. Robert Kopitsch considers a new date from the end of 2023 to the first quarter of 2024 to be realistic. A request corresponding to the green “shadow reporter” Ernest Urtasun, who is said to have been in charge of pushing the PoW ban, remained unanswered. at the time of publication, even after repeated consultation.
In this scenario, the so-called “Travel Rule” would also be affected by the delay. The regulation is closely related to MiCA and obliges crypto service providers to collect customer data above a certain transaction threshold. Traditional financial providers must also adhere to similar guidelines to prevent illegal financing, for example.
France under pressure
A possible postponement of MiCA would also affect France. The Great Nation currently chairs the Presidency of the European Council. If Bitcoin ban factions consider a plenary session on MiCA, France would be pressed for time as the Czech Republic takes a seat from June 30.
As insiders report to BTC-ECHO, the current French-led Council Presidency wants to place so-called “CASPs” (Crypto Asset Service Providers) under shared supervision. Therefore, smaller crypto providers need to be supervised by national authorities, while large exchanges like octopuses, binance or base of coins would be under the supervision of ESMA, based in Paris. According to the insider source, France is expecting an influx of big crypto players. A blockade by the Greens, the Left and the Social Democrats would frustrate these plans. Insider sources inform BTC-ECHO that it was therefore conceivable that the Liberal faction, which was predominantly French-led, could be swayed in favor of a bitcoin ban. However, this effect did not occur.
The de facto ban on Bitcoin kept the crypto space in suspense for weeks. It turned out that the MiCA discussions were less constructive than political in nature. It seems as if the Greens, the Left and the Social Democrats want to be the face on the issue of the sustainability of Proof-of-Work cryptocurrencies, knowing full well that a ban would have had only a marginal chance of enforcement in the EU anyway. .
While the rejection of the Bitcoin ban should be cause for relief, the MiCA case shows how quickly political trench warfare can give way to constructive discourse. The eyes of the crypto space are now on the three-way dialogue.
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