The newest version of MiCA legislation can sign the end of the crypto industry in the EU.
Its text has been amended many times, and when the most controversial provisions concerning PoW-based cryptoassets were removed last week, MiCA became a comprehensive legal framework protecting consumers and setting AML rules in a rather standard way (although including all NFTs listed on marketplaces into its scope would definitely impede the NFT sector).
? Yesterday, however, it became known that the PoW-related provisions are back.
After claiming that PoW is bad for the environment because “the energy consumption of the Bitcoin network equals that of entire countries” the amended text says:
“Crypto-assets shall be subject to minimum environmental sustainability standards with respect to their consensus mechanism used for validating transactions, before being issued, offered or admitted to trading in the Union” (art. 2a). Crypto service providers will have to phase-out their activities with respect to the cryptoassets that do not comply with the abovementioned standards.
? The argument and the narrowness of reasoning seem to come from a bad copy-paste anti-crypto article. Crypto mining uses more renewable energy than any other industry in the world, and it has the potential to not only become 100% green, but also help reduce flare gas emissions into the atmosphere (oil extraction byproduct) or redirect miners’ waste heat to residential heating or industrial use. Read more on mining and ecology here.
MiCA does not mention any of this, which makes us doubt that ecological concerns are the real reason behind it.
? If MiCA is approved as is, it would mean a de facto ban of any PoW-based crypto, such as Bitcoin or Ethereum (but also Bitcoin Cash, Litecoin and Dogecoin). This, in turn, will effectively sign the end of official crypto industry in the EU: people will still have their BTC and ETH, but they will use non-EU services to trade them.
This is detrimental for both EU economy and consumer protection – the very thing that MiCA is supposed to reinforce.
MiCA is set for vote by the EU Parliament on Monday, March 14th, followed, in case of adoption, by a trilogue with the EU Council and the EU Commission.
? To prevent it from happening let’s all contact our European Deputies and let them know how immature, hypocritical and dangerous these provisions are:
? Find your deputy here: https://www.europarl.europa.eu/meps/en/home
? Send them an email or tweet:
“An outright ban of proof-of-work assets will cripple the EU market, encourage circumvention of law, worsen consumer protection, and push the industry outside the EU – all with no benefit to the environment! Please ask the ECON Committee to oppose Amendments ALT A and ALT G.”