EU Proposes Ban on Proof of Work Cryptos Like Bitcoin – Blockchain Information, Opinion, TV and Jobs

By Marcus Sotiriou, Analyst on the UK based mostly digital asset dealer GlobalBlock

Bitcoin climbed in a single day to $39,000, because the crypto market stays in a state of indecision. There are bullish and bearish catalysts on the horizon, however within the brief time period dangers are dominant in my view.

On the optimistic aspect, Terra founder Do Kwon says the Luna Basis Guard is planning so as to add $1.2 billion Bitcoin to its reserves ranging from this week with a view to make the UST stablecoin extra secure and reduce the danger of UST shedding its peg. Do Kwon mentioned, “If there may be any confusion left at this level, we’ll continue to grow reserves till it turns into mathematically not possible for idiots to assert depeg danger for UST.” He has hinted that they plan on rising their Bitcoin reserves to $10 billion sooner or later.

Nonetheless, the present dangers out there are vital. The European Union’s (EU) have proposed legislative framework for governing cryptocurrencies known as Markets in Crypto Property (MiCA). A earlier draft of the MiCA framework proposed a ban of crypto providers that depend on environmentally unsustainable consensus mechanisms, beginning in January 2025. This provision was scrapped after backlash from the business.

Nonetheless, a brand new draft features a comparable proposal. It says that crypto property “shall be topic to minimal environmental sustainability requirements with respect to their consensus mechanism used for validating transactions”, which refers to cryptos that use Proof of Work. As well as, cryptos which might be power intensive should “arrange and keep a phased rollout plan to make sure compliance with such necessities”. Ethereum plans to maneuver from Proof of Work to Proof of Stake, however Bitcoin is unable to make this transition. Due to this fact, Bitcoin shall be affected by this laws. The vote is going down at round 1pm UK time.

The crypto neighborhood has reacted swiftly to stress legislators to oppose the proposal. Paris legislator Pierre mentioned, “MEPs have taken a tough line on crypto-assets, pondering they’re defending residents. In actuality, this model is mortifying for our competitiveness whereas, on the identical time, President Biden has signed an act calling for the US to completely embrace this new ecosystem.” I agree with Pierre, and if there’s a majority vote in favour of the proposal I feel the EU will depart alternatives to different nations who totally embrace the crypto revolution.