The present MiCA report’s phrasing could lead to crypto service providers imposing a proof-of-work ban on ‘unsustainable’ crypto assets.
The most recent draft of the divisive MiCA report still includes wording that might prevent crypto service providers from trading in proof of work coins. As a result, a prospective proof-of-work ban in Europe is now plausible.
Dr. Stefan Berger is the MEP in charge of MiCA reporting. He verified the removal of the disputed Article 61 paragraph 9c earlier this month. Berger feels that the regulatory changes will be a game-changer for the crypto markets in terms of innovation. The MiCA, like Biden’s executive order, is primarily concerned with protecting citizens while investing in crypto assets.
Bitcoin’s Phrasing Perplexes
The language of the MiCA report, on the other hand, differs dramatically from that in the White House version. The EU act, if passed, would effectively prohibit markets from listing any crypto asset that does not match their “environmental sustainability criteria.”
Because Article 3a was not included in the original agreement, it was difficult to create a definition for environmental sustainability norms. However, a closer look at the most recent change reveals the EU’s definition of an unsustainable crypto asset.
If a crypto asset has a significant environmental impact when run at a sufficiently big scale, it is unsustainable. It must take into account energy usage, real-world resource utilization, carbon emissions, electronic waste, and incentive design specifics.
The current report is equally as harmful for Bitcoin as the prior one because of this omitted definition. Something aggravated the situation for European cryptocurrency investors. The act will also force all crypto services to implement KYC and AML procedures, according to a new modification in the newest version.
All exchanges will expect to offer “complete traceability of every transaction exceeding EUR 1000,” according to a provision. The privacy-conscious crypto community, on the other hand, will not please.
They will also compel to provide information to authorities upon request. As well as to monitor and freeze the assets of anyone subject to sanctions. They will also have the physical address of the transaction’s initiator.
Reaction to the possibility of a work-proofing ban
“Stand for Financial Freedom: Our Position on MiCA’s Proof of Work Ban,” Ledger said in a statement released on Friday. According to the paper, if the legislation passes, “Europe’s inventive and burgeoning digital asset market will vanish”. They go even farther, urging fans to e-mail, contact, or tweet their MEP to try to stop the act from moving forward in its current form.
Pierre Person discussed the report, a member of the European Parliament from Paris. He believes that the future of crypto-assets in Europe is doomed. The European Parliament is putting their monetary and financial sovereignty at risk by prohibiting Bitcoin and Ether and hindering the usage of NFT and DeFi.
The report does not have unanimous support, according to Person’s comment, and hence is unlikely to pass. However, several sections of the report expects to receive unanimous approval. Articles requiring all cryptocurrency projects to submit a white paper as well as a comprehensive list of agreed-upon definitions of new blockchain technologies will well receive.
Due to the need to put a stake in the ground on crypto, post-vote negotiations may be necessary to remove amendments that would restrict proof of work coins.