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Will the EU ban bitcoin mining? This is why it is unlikely

Mar 14, 2022

Will the EU ban bitcoin mining? This is why it is unlikely

 

Bitcoin mining and regulation are a hot potato for many countries. The European Union is now planning to introduce a framework for cryptocurrencies and some parts of this framework are now causing slight panic in the crypto mining industry. In one draft version of the proposal, the EU would completely ban proof-of-work (PoW) mining. But it doesn’t look like there will be an outright ban.

Bitcoin mining ban unlikely

The EU is planning to introduce a regulatory framework for cryptocurrencies, called Markets in Crypto Assets (MiCA). Recently, the crypto mining community realized this framework would effectively ban Bitcoin due to its high energy consumption. The proposal that included the outright ban is supported by parties such as the Greens, which is not surprising considering Bitcoin does indeed use a lot of energy.

 

It is, however, good to put this consumption into perspective. Looking at other sectors, it is obvious that Bitcoin’s energy consumption is relatively small. A blanket ban for PoW cryptocurrencies would therefore be very draconian and unnecessarily limit innovation within the fintech sector.

Fortunately, an amendment was proposed that is not as strong worded. Unfortunately, though, the bitcoin miners in the EU aren’t completely out of the woods yet. Both the versions with the ban and without are on the table. On the 14th of March, the ECON committee of the European Parliament will vote.

Thin majority against ban

According to Patrick Hansen from Unstoppable DeFi, there is a slight majority against the POW-ban. If the proposal with a de facto ban would be accepted, it would be surprising considering the recent developments within the crypto mining sector.

 

More and more research is being conducted into the true impact of Bitcoin mining. For example, it was found that only 0,8% of the global CO2 emissions are produced by bitcoin miners. Also, more and more opinions are shifting towards the realization that mining actually stimulates the transition to greener energy sources, by making them more economically sustainable.

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