In another landmark decision shaping up the crypto industry, the European Union (EU) has axed proposals of banning Bitcoin mining and trading. Majority of the EU members voted against prohibiting energy-intensive Bitcoin related activities, while rooting for making the processes greener, easier on the environment. The name of EU’s crypto-centric bill is: Markets in Crypto Assets (MiCA). After getting approved from EU’s parliamentary committee, MiCA awaits inputs from EU’s executive arm and member states to become a law. The framework largely revolves around consumer protection as well as prevention of market manipulation and financial crimes in the crypto sector.
The Economic and Monetary Affairs Committee of the EU has refreshed the MiCA bill with adding a ‘minimum environmental sustainability standard’ for cryptocurrencies to adhere to.
Cryptocurrencies such as BTC are generated on advanced computers, required to solve complex proof-of-work algorithms. These machines need to be plugged in at all times, which gobbles up large chunks of electricity.
EU’s bill now wants to add credit to crypto assets based on how sustainable they are.
The committee has passed a separate proposal to define whether crypto can be viewed as a sustainable investment. If approved, cryptocurrency mining could be added to the EU’s taxonomy for sustainable finance, a Bloomberg report said.
While MiCA is yet to get insights from other EU-related entities, Industry insiders have appreciated EU’s overall approach.
“The EU not banning proof-of-work cryptos like Bitcoin and instead proposing to include crypto-assets mining in the classification system for sustainable activities by 2025 is an ‘innovation friendly’ approach to crypto laws,” Rohas Nagpal told Gadgets 360. Nagpal is the author of the ‘Crypto Playbook’ and Chief Blockchain Architect of the Hybrid Finance (HyFi) Blockchain.
EU Parliament voted against Ban On Bitcoin’s Proof-Of-Work & added #Bitcoin mining to the EU sustainable finance taxonomy.
Tells a lot.
— Aditya Singh (@CryptooAdy) March 14, 2022
:boom:EU Parliament just voted against proof-of-work “ban”.#Bitcoin is winning! :muscle:
— Bitcoin Archive 🗄:rocket::moon: (@BTC_Archive) March 14, 2022
The energy impact of crypto mining has been a topic of concern among several nations.
As per Cambridge researchers, the mining of Bitcoin consumes around 121.36 terawatt-hours (TWh) of energy a year.
In January 2022, industry experts presented their testimonies before the US House Energy and Commerce Oversight Subcommittee suggesting alternate ways to power crypto mining operations.
Some regions in the world are already working on making BTC mining more energy efficient.
Nayib Bukele, the President of El Salvador has revealed his plans of building a Bitcoin City at the base of the Conchagua volcano, in order to power Bitcoin mining with renewable energy and tackle the carbon footprint issue associated with the process.
Francis Suarez, the mayor of Miami, has also proposed setting up a Bitcoin-mining facility near a nuclear power plant in Florida. As per a report by Latest News Today, nuclear energy is on the brink of being recognised as a true environmental, social, and corporate governance (ESG) solution in terms of energy.
Recent findings by research platform CoinShares, however, claims that Bitcoin mining contributed only 0.8 percent of world’s total carbon dioxide (CO2) emissions in a year and that about 60 percent of Bitcoin-mining activity is powered by fossil fuels.