The Markets in Crypto Assets (MiCA) regulatory package has cleared another potential hurdle this week and is moving to the next stage of the EU legislative process. Proponents of the controversial text banning proof-of-work (PoW) cryptocurrencies, which was recently removed from the draft, did not take the opportunity to block progress on the draft.
The EU Parliament, Commission and Council will negotiate MiCA regulations
Wording proposed by Members of the European Parliament (MEPs) that aimed to enforce a ban on cryptocurrencies that rely on PoW mining was removed from MiCA before a recent vote. In mid-March, the Economic and Monetary Affairs Committee (ECON) approved the rules without a provision effectively prohibiting the provision of services for bitcoin and the like.
However, the crypto community could not greet the development with relief, as it was still possible to prevent the project from advancing to the next stage of the legislative process: the tripartite dialogue 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 for filing an objection expired at midnight on Thursday, March 24, German newspaper BTC Echo noted in a report. Until then, the Green, Left and Social Democrat factions, the supporters of the de facto bitcoin ban, could stop the progress of MiCA and try to reintroduce the text that provoked negative reactions from the crypto community.
Stefan Berger, the rapporteur for the legislation, confirmed on social media that MiCA will now be subject to negotiations between the three main EU institutions. Berger, who is also a member of ECON, thanked his fellow committee members 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 emphasized that he had suggested connecting MiCA to the EU Taxonomy for Sustainable Finance. With its taxonomic 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.
Regulators and officials in several EU member states have called for a Union-wide ban on energy-intensive PoW cryptocurrency mining, citing environmental reasons. The group includes the bloc’s economic powerhouse Germany and Sweden, which have warned that the growing 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 light of concerns that Russia may use crypto to avoid sanctions imposed over its invasion of Ukraine, and crypto assets were the subject of a recent deal to extend restrictive measures. . In February, European Central Bank President Christine Lagarde urged the Union to quickly pass new cryptocurrency regulations for the same reason.