Key takeaways:
- The European Union parliamentarians are set to vote on a bill that could severely limit Bitcoin and PoW mining in the member states
- The provision calling for PoW chains to shift to PoS was reintroduced in a “last-minute” change
- The vote will take place later today at 1:45 PM (CET)
EU legislators are voting on a bill that could have sweeping ramifications for PoW mining
On Monday, the EU Parliament will be voting on the Markets in Crypto Assets (MiCA) bill, which features provisions aimed to limit the energy-intensive Proof-of-Work (PoW) mining in the Union. For context, Bitcoin, Ethereum, and a number of other digital belong to the PoW category.
If the vote passes, Bitcoin mining in member states would essentially become prohibited. The provision in the MiCA bill calls for PoW to be phased out in favor of a more environmentally friendly Proof-of-Stake (PoS) consensus mechanism. Currently, it is not exactly clear if trading of PoW digital assets would also be forbidden.
Small-scale PoW mining would reportedly be legal under the new provisions. However, there are no parameters in the bill describing what exactly classifies as small-scale.
The provisions targeting PoW mining first surfaced last week. While they were quickly dropped due to widespread criticism, the language prohibiting PoW coins ultimately found its way back into the bill’s final draft mere hours before the vote.
The broader crypto community was obviously enraged by the “last-minute” change. Patrick Hansen, a blockchain advocate and head of Strategy and Growth at Unstoppable Finance, took to Twitter to voice his frustration.
Jeremy Allaire, one of the co-founders and CEO of Circle, the issuer of the USDC stablecoin, called the vote “extremely high stakes” and remarked that it’s “extraordinarily concerning” that the vote made it this far in the legislative process.
According to Galaxy Digital’s research, the Bitcoin network has an energy footprint of 113.8 THw/yr, or roughly 0.05% of the global energy consumption. Per Cambridge University, Europe accounts for less than 15% of the global Bitcoin hashrate, with the highest concentration of miners residing in Germany and Ireland.
While Bitcoin’s reliance on fossil fuels is undoubtedly problematic, there are plans of shifting the network towards carbon-neutral energy sources in the coming years and drastically lowering the network’s carbon footprint.
The MiCA vote is scheduled for later today, at 1:45 PM (CET). You can follow the vote in real-time through a web stream.
UPDATE (March 16, 12:35 UTC): On Monday, the Committee on Economic and Monetary Affairs (ECON) voted against a provision limiting PoW digital currencies being included in the MiCA bill.
