European crypto regulatory framework goes to three-way consideration without PoW ban

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The much-dreaded prospect of a ban on cryptocurrencies that use proof-of-work (PoW) consensus is making its way into a key European digital asset directive appears to have blown over.

March 24 marked the last day when the European Parliament could stop the current draft of the Markets in Crypto Assets (MiCA) from proceeding to further consideration.

The proponents of outlawing operations with PoW-based digital assets could not muster enough support to challenge the bill’s current version, meaning that MiCa will safely pass on to be reviewed in tripartite meetings between the European Parliament, European Commission and European Council.

On March 21, Stefan Berger, the European Parliament member assigned to present MiCA to the legislature, announced that the regulatory project had passed the specialized committee and had been granted the mandate to go into the tripartite meetings.

Berger also warned that the mandate could be challenged if one-tenth of all MEPs (71 members) vote against it — in that case, the second round of voting would be required at the April plenary. He called it the last possible attempt to freeze the moderate version of MiCa that doesn’t include a controversial ban on proof-of-work (PoW) mining.

MiCA is a regulatory framework that contains 126 articles as well as a detailed plan of their implementation by the EU’s and member states’ institutions. The draft was introduced by the European Commission back in 2020 as a part of its Digital Finance strategy.

Early on March 25, Berger has confirmed that MiCA avoided the challenge in the EU parliament and will pass to three-way consideration. He shared his optimism about the next steps of the process and mentioned putting forward a proposal to include cryptocurrency mining activities in the EU taxonomy.