Proof of Work (PoW) The use of cryptocurrencies working with the mechanism was in the gray area in the European Union (EU) proposed legal framework for managing virtual currencies, known as the Markets in Crypto Assets (MiCA) framework.
However, on Monday, March 14, European Parliament The Economic and Monetary Affairs Committee decided to vote against the ban on Proof-of-Work mechanisms underlying popular cryptocurrencies such as Bitcoin and Ethereum.
As a result of the voting, the provision that could force PoW-using cryptocurrencies to switch to more environmentally friendly mechanisms did not receive the necessary votes from the parliament.
To remind you that Proof-of-Work is different from Proof-of-Stake, cryptocurrencies such as Bitcoin and Ethereum work with the PoW mechanism and there is a consensus mechanism that requires a lot of energy for this mechanism to work.
As a result, the calculation process has come under intense scrutiny by legislators in the European Union due to concerns about energy use. As Bitcoin’s popularity grew, so did the debate over its energy consumption and environmental impact.
Despite Bitcoin accounting for only 0.08% of the world’s carbon dioxide (CO2) emissions in 2021, the network’s power use has been subject to frequent criticism by the press and anti-cryptocurrency, according to the latest report.
Previous Draft Provision Cancelled
An earlier draft of the MiCA framework contained a clear-cut section advocating a restriction on crypto services based on ecologically unsustainable consensus techniques, starting in January 2025, with the ban coming into effect immediately. However, the clause was repealed after widespread opposition in the industry.
One of the EU parliamentarians responsible for the MiCA legislative framework of the period, Dr. Stefan Berger also stated that this article, which was defined as problematic, has been repealed, but that this is not a definitive decision.
The new draft included a proposal, identical to the previous one, which stated that crypto assets “will be subject to minimum environmental sustainability standards according to the consensus mechanisms used to verify transactions,” referring to cryptos using Proof of Work. Additionally, high-energy cryptos will need to “establish and maintain a phased deployment plan to ensure compliance with such requirements.” Since Bitcoin failed to complete the transition, it would have been directly impacted by this legislation had the EU not voted against it.