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New Changes In EU Crypto Legislation

Language regarding proof-of-work cryptocurrencies has once again been added to a proposed legislative framework set to be voted by a European Parliament committee on Monday, sparking a new round of controversy. 

As previously reported, the Markets in Crypto-Assets Directive, or MiCA, previously faced industry criticism and pushback after some of the included language appeared primed to outlaw proof-of-work cryptocurrencies, namely bitcoin, over concerns about energy usage. The provisions were ultimately stripped, but according to statements made over the weekend and a newly obtained version of the text, a more watered-down provision appears to have been included once again.

A “compromise” version, also dubbed v9, reviewed by The Block, now states that “Crypto-assets shall be subject to minimum environmental sustainability standards with respect to their consensus mechanism used for validating transactions, before being issued, offered or admitted to trading in the Union.” The European Commission, the EU’s executive branch, would be required to set “minimum environmental sustainability standards for consensus mechanisms used for validating crypto-assets transactions” and “the date or the dates from which the requirement to comply with the minimum environmental sustainability standards takes effect, including a phase-in period.”

“Crypto-assets that are issued, offered or admitted to trading in the Union before [please insert the date of entry into force of this Regulation] shall set up and maintain a phased rollout plan to ensure compliance with such requirements,” the text also states. 

The language further includes a carve-out for “small-scale” networks, and the Commission would be tasked to determine “the conditions under which a consensus mechanism shall be deemed operated on a small scale.”

According to CoinDesk, another compromise version is in flux with softer language than the provision above. 

As expected, the newly released version has sparked more pushback. 

French crypto hardware company Ledger issued a statement on Friday, saying: “Individuals and organizations should be free to choose the technology most appropriate to their needs. Policymakers should neither impose nor discriminate in favor of a particular technology. This is deeply concerning and would have serious consequences for Europe.”

The vote is set to take place on March 14. 

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