The Markets in Crypto Assets (MiCA) regulatory package passed another potential hurdle this week and is moving to the next stage of the EU’s legislative process. Proponents of a controversial text prohibiting proof-of-work (PoW) cryptocurrencies, which was recently dropped from the draft, did not take an opportunity to block the draft’s progress.
EU Parliament, Commission and Council to Negotiate Over MiCA Regulations
Wording proposed by members of the European Parliament (MEPs) which aimed to impose a ban on cryptocurrencies relying on PoW mining was removed from MiCA before a recent vote. In mid-March the Committee on Economic and Monetary Affairs (ECON) approved the regulations without a provision that would have effectively prohibited the offering of services for bitcoin and the like.
However, the crypto community couldn’t greet the development with relief as it was still possible to prevent the draft from progressing to the next stage of the legislative process – the trilogue between the European Parliament, the European Commission, the executive arm in Brussels, and the Council of the EU, the other legislative body of the Union.
The deadline by which an objection could be filed expired at midnight on Thursday, March 24, the German crypto news outlet BTC Echo noted in a report. Until then, the factions of the Greens, Left and Social Democrats, the supporters of the de facto bitcoin ban, could halt the advance of MiCA and attempt to reintroduce the text which had sparked negative reactions from the crypto community.
Stefan Berger, the rapporteur for the legislation, confirmed on social media that MiCA will now be subjected to negotiations between the three leading EU institutions. Berger who is also a member of ECON, thanked his colleagues at the committee and other supporters of his efforts. In a tweet he stated:
#MiCA: Gute Nachricht! Mein Mandat wird NICHT gechallenged. Ich werde nun in die Trilog-Verhandlungen gehen mit der Position, dass es keinen #PoW-Ban geben wird. Das EU-Parlament gibt mir Rückenwind & zeigt Innovationskraft /1
— Stefan Berger (@DrStefanBerger) March 25, 2022
The MEP also pointed out that he had suggested connecting MiCA to the EU Taxonomy for Sustainable Finance. With its taxonomy classification system, the EU is evaluating economic activities according to their sustainability and trying to direct investments towards sustainable projects. “I am optimistic that this proposal will be approved by the Commission and the Council,” Berger emphasized.
Regulatory bodies and officials from several EU member states called for a Union-wide ban on the energy-intensive PoW crypto mining, citing environmental reasons. The group includes the bloc’s economic powerhouse, Germany, and Sweden which warned that the increasing use of renewable energy to mint bitcoin comes at the expense of climate neutrality goals in other sectors.
EU institutions have been working to regulate the European crypto space in the light of concerns that Russia may use cryptocurrencies to evade sanctions imposed over its invasion of Ukraine and crypto assets were targeted in a recent agreement to expand the restrictive measures. In February, President of the European Central Bank Christine Lagarde urged the Union to quickly approve the new crypto regulations with the same motive.
Do you think the European Union will adopt the MiCA regulations without the bitcoin ban? Tell us in the comments section below.