EU Delays Vote on Crypto Regulations Amid Bitcoin Energy Debate

The European Parliament has delayed a vote on the Markets in Crypto Assets Directive (MiCA) due to fears that it would be “misinterpreted as a de facto Bitcoin ban” over questions surrounding the industry’s energy demands. 

MiCA—a much-anticipated market regulatory act targeting the crypto industry—was initially slated for a vote on February 28, 2022. However, the chairman of the Economics Committee, Stefan Berger, announced the cancellation of the vote on Twitter.

The principal reason for this was late-stage changes to the future status of proof-of-work (PoW) blockchains like Bitcoin and Ethereum. Some reportedly interpreted these changes as a potential ban on these blockchains.

Berger tweeted that discussions around MiCA had indicated that “individual passages of the draft report can be misinterpreted & understood as a POW ban.” He added that it would be “fatal” if the EU Parliament “sent the wrong signal with a vote under these circumstances.”

Europe and crypto mining

This is not the first time Europe has wrestled with the environmental impact of proof-of-work cryptocurrency mining. 

Last year, Sweden’s financial services regulator, Finanspektionen, called for a ban on energy intensive mining. 

In fact, the regulator went as far as to say proof-of-work cryptocurrency mining was a threat to Sweden’s ability to meet their Paris Agreement obligations. 

“Sweden needs the renewable energy targeted by crypto assets by crypto asset producers for the climate transition of our essential services, and increased use by miners threatens our ability to meet the Paris Agreement,” the regulator said at the time. 

“Energy-intensive mining of crypto assets should therefore be prohibited.” This claim—which came hot off the heels of last year’s COP26 conference in Scotland—was also shared by the Swedish Environmental Protection Agency. 

What’s more, the European Securities and Markets Authority also called for a ban on proof-of-work mining in January. 

Erik Thedeen, vice chair of ESMA (and director general of Finansinspektionen) told the Financial Times that Bitcoin mining had become a “national issue” in Sweden.