Proof of Work scrapped from EU crypto bill

European Parliament Committee on Economics and Monetary Affairs member Stefan Berger has tweeted that the bill, which will go to a vote on March 14, no longer contains text regarding Po Proof of Work (PoW) consensus blockchains.

The bill, titled Markets in Crypto Assets (MiCA) is the framework for regulations and compliance which will be upheld by all European Union (EU) countries.

Originally the bill was to include a provision that tackled PoW consensus due to the environmental impact of mining. The bill was postponed and now looks to have removed the PoW discussion altogether.

The EU has been slow to release regulations on cryptocurrency which has allowed the industry to grow rapidly.

With all the recent scams and theft involved with digital currencies the need for regulatory clarity has been prioritized. The original bill included restrictions on PoW blockchains like Bitcoin and Ethereum due to the power consumption required to keep the chains running.

The MiCA framework was first introduced in September 2020 but was not adopted by the EU committees until November 2021. The votes were postponed due to discussions with cryptocurrency stakeholders and their questions about PoW restrictions.

PoW has been heavily criticized for the power required to mine transactions. While many miners have investigated renewable energy or alternative energy sources there are still a great deal of nodes that use conventional means to power their machines.

Newer chains like Cardano use different consensus mechanisms which do not require intense hardware or power requirements to run.

Unfortunately, many of these newer chains have not attracted the number of developers or applications as Ethereum has.

Ethereum is set to release Ethereum 2.0 this year, which will move the blockchain from PoW to Proof of Stake, reducing the carbon footprint drastically.

By putting this measure up to a vote, the EU appears to be overtaking the US in coming up with an active regulatory framework that could introduce more clarity in how crypto assets should be used and in what capacity.

However, President Joe Biden is set to sign an executive order this week which would allow several federal agencies, including the Securities and Exchange Commission and the Commodity Futures Trading Commission to begin joint consultations and coordination of potential crypto regulation.

Better and more transparent crypto regulation is sorely needed in the context of one of the biggest military conflicts in Europe of the past 50 years with Russia waging war on Ukraine.

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Written by Barney

Co-founder

Barney is co-founder of CryptoGamblingNews.com. When not at work he can usually be found behind a Nikon. He's won numerous international competitions for his photography and volunteers as a content creator for aid organisations in Africa.

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