THE END OF BITCOIN? MiCA LAW MAKES ITS BIG RETURN
While the vote on the MiCA (Markets in Crypto Assets) law initially scheduled for 28 February was postponed, the issue of the regulation of blockchains operating on the so-called "Proof-of-Work" system was voted on Monday 14 March 2022.
What about this new regulatory framework?
Europe aims to harmonize EU-wide standards for the crypto-currency environment and the " tokenomie emerging ". To protect consumers and investors, while ensuring the stability of the economy, the MiCA directive is a pillar of the European digital finance strategy unveiled in September 2020. Lawmakers say they want to reconcile innovation and protection by allowing a package of measures to "further support the potential of digital finance for innovation and competition while mitigating risks".
The MiCA legislation in its first version contains a provision that crypto assets "must be subject to minimum environmental sustainability standards with respect to their consensus mechanism used to validate transactions, before being issued, offered or admitted to trading in the Union". This approach effectively bans the majority of crypto-currencies such as bitcoin based on the so-called proof of work, an energy-intensive mining technology that allows miners to verify incoming data on the ledger, validate the authenticity of transactions or even create new blocks.
The difficulty is that without bitcoin, crypto businesses cannot operate profitably. European companies will therefore have to move outside the EU, which could force Europeans to use unregulated platforms.
It was in the face of all these issues that the European Parliament met on 14 March to make progress on the MiCA bill. The amendment was rejected by a majority of MEPs, with 32 votes against the change and 24 votes in favor. However, a majority voted for an alternative legislative proposal to be presented by the Commission by January 2025.
It seems that bitcoin still has a long way to go! To be continued...