Home News Environmental sustainability key sticking point in EU MiCA bill

Environmental sustainability key sticking point in EU MiCA bill

3405
0

The outcome of today’s vote in the European Parliamentary Committee on Markets in Crypto Assets will determine whether Bitcoin mining is legal in the European Union (MiCA).

After removed from the law previously, a controversial line about crypto mining’s “minimum environmental sustainability” returned. The new line would compel blockchain operators to submit a rollout strategy outlining how they expect to achieve environmental sustainability. If a plan isn’t submitted, coins may be banned from being mined or traded in the EU.

The bill would have a direct impact on proof-of-work (PoW) chains, even if it is out of mention explicitly. The Bitcoin network, Ethereum, and a variety of other crypto assets use the PoW consensus mechanism.

No rollout strategy can be issued on behalf of Bitcoin (BTC) because it is decentralised. The lack of such a plan could jeopardise the continued functioning of Bitcoin mining operations throughout the EU.

According to research from Cambridge University and Statista from last year, the EU accounts for roughly 12-14% of worldwide Bitcoin hashing power. With Germany and Ireland supplying the majority of it.

Concerns about Bitcoin mining’s energy consumption and carbon emissions have risen to the fore in discussions on how the EU should regulate it. When confronted with raw facts, though, those worries begin to seem out of place.

A ban on mining would drive intellect and creativity out of the region

The Bitcoin network consumed 90.86 Terrawatt hours (Tw/H) of energy annually as of August 2021, according to a report published by Frankfurt School in November. This amounts to less than 0.05% of global consumption. These figures are difficult to determine correctly. However, the network is responsible for just about 0.08% of total global carbon emissions.

A ban on mining, according to French member of parliament Pierre Person, would drive intellect and creativity out of the region. In a tweet on Saturday, he said the European Parliament is “mortgaging our monetary and financial sovereignty”. By banning Bitcoin and Ether (ETH) and “complicating the use of NFT and DeFi.”

Ethereum will not involve for long if the measure passed as-is. The Ethereum 2.0 “Merge” projected for completion this year. Transforming the network into a proof-of-stake (PoS) network that does not rely on actual mining equipment to establish an agreement. Bitcoin miners, on the other hand, may face more severe consequences.

Previous articleAustin mayor embraces Web3 tech and crypto payments
Next articleBinance awarded Bahrain crypto service provider license