POW: ban initiative and voting against it by EU parliament

On Monday, March 14, the European Parliament Committee on Economic and Monetary affairs voted down the prohibition on Proof-of-Work-based systems that underpin the most popular cryptocurrencies like Bitcoin and Ethereum.

The provision aimed to restrict the use of the Proof-of-Work (PoW) cryptocurrencies throughout the countries of the European Union. The major concern of the authors of the bill was the energy-intensive computing process, which lies at the core of the digital currencies and exerts a negative influence on the environment.

At the moment, EU countries have to issue their own regulatory requirements for crypto assets in accordance with some overarching guidelines. Even though the initiative failed to get the votes required in the parliament, by 1 January 2025 the Commission shall present amendments to the rejected provision, with a view to including in the EU sustainable finance taxonomy any crypto asset mining activities that contribute substantially to climate change mitigation.

The Committee voted 30–23 to keep the provision out of a draft. If enacted, the legislative proposal could have forced PoW cryptocurrencies to shift to more environmentally friendly mechanisms, or even criminalized the cryptocurrencies across the EU.bi