The EU Ban on “energy-intensive cryptocurrencies” was in the room at the end of February. Many people feared a restriction on Proof-of-Work (PoW) assets at the time. In Parliament, the threat was thwarted at the last possible moment.
In a trialogue with the Commission and the Council, lawmakers from the EU Parliament’s Greens, Left, and Social Democrats are bringing a PoW ban back on the table. In the worst-case scenario, the demands could force crypto providers to abandon PoW-based coins like Bitcoin. The draught is in front of BTC-ECHO and has a lot to offer. However, one after the other.
The first condition is that crypto projects give as much information as possible in their white papers. “General information on the environmental and climate implications of a [jeden] consensus process,” according to the EU Parliament’s wishes.
This is problematic for Bitcoin, the most well-known PoW-based cryptocurrency because the white paper cannot be changed afterwards. The experts are concerned. BTC-ECHO receives a warning from Blockchain for Europe’s Robert Kopitsch:
The new demands of the S&D and Greens are not only an immense effort for everyone involved, but also create new regulatory uncertainties, which in extreme cases could lead to the ban of some crypto assets such as Bitcoin. The initiative also goes far beyond the agreement already reached in the EU Parliament.
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Furthermore, EU Parliament negotiators want crypto providers to be required to disclose information regarding the most significant negative environmental and climate implications for each crypto asset offered “prominently” on their platform.
Furthermore, the European Securities and Markets Authority will establish sustainability norms and benchmarks. The passed parliamentary draught originally referred to “guidelines.” Negotiators from the Green, Left, and Social Democrat camps are pushing the measures to a required level with the revised phrasing.
If crypto providers wish to operate in the EU, they must comply with the requirements that have yet to be specified. In addition, the platforms should adopt “effective measures” to “adequately address negative environmental and climate impacts.” As a result of noncompliance, the cryptocurrency may be banned from trading platforms.
We reviewed the prohibition controversy around Bitcoin in the April issue of BTC-ECHO magazine. At the time, the negotiations were less constructive and more ideological. It appears to be the case again this time. It remains to be seen how far the rest of Parliament has accepted the new demands.
However, it appears that the anti-ban camp, which includes the Greens, the Left, and the Social Democrats, is attempting to turn the parliamentary defeat into an ideological win in the trilogue. It remains to be seen if this will be successful. The trilogue talks are taking place today, June 14th.
