Members of the European Parliament have recently voted down a proposal that aimed to impose a ban on bitcoin and similar cryptocurrencies due to the high energy consumption associated with mining practices.
The economic and monetary affairs committee cast a vote of 30-23 against including a provision in the proposed Markets in Crypto Assets (MiCA) framework. This provision would have mandated that all cryptocurrencies adhere to the European Union’s environmental sustainability standards regarding their consensus mechanisms.
Had the provision been enacted, it would have effectively prohibited proof-of-work mining, which is the method employed by bitcoin, as well as ether and litecoin. The requirement would have compelled these cryptocurrencies to transition from proof-of-work to the more energy-efficient proof-of-stake consensus mechanism.
Proof-of-stake is already utilized by many newer cryptocurrencies, and ether has plans in place to adopt this method within the year; however, bitcoin has no such plans in motion.
Despite rejecting the ban, the committee has requested that the European Commission incorporate crypto asset mining into its taxonomy for sustainable activities by 2025, with the aim of minimizing its carbon footprint.