European Parliament delays vote on crypto assets bill over proof-of-work debate

The parliament of the European Union has delayed a key vote on its long-awaited cryptocurrency market regulation in response to outrage from the crypto world.

The Markets in Crypto-Assets Directive, known as MiCA, was on the docket for a vote on February 28 that would send it from the European Parliament into negotiations between that body and the Council of the European Union and the European Commission — putting future alterations into question.

However, Stefan Berger, chairman of the Economics Committee and rapporteur in charge of that vote, has postponed it, Berger’s office told The Block today. 

A source close to negotiations over the directive told The Block that the primary point of contention was late-stage changes that some interpreted as bans on proof-of-work networks, primarily out of concerns over their energy usage. After a leak generated negative press as well as overwhelming Twitter response, the right and center-right members withdrew support for the latest amendments. 

Berger took to Twitter to explain that “As rapporteur, it is central for me that the MiCA Directive is not misinterpreted as a de facto Bitcoin ban.”

The directive has been in progress since 2019. The European Parliament has not publicized the most recent amendments. A February 21 draft seen by The Block reads: 

“It is therefore urgent to highlight the need for consensus mechanisms to deploy more environmentally friendly solutions and call the Commission to identify those consensus mechanisms that could pose a threat to the environment having regard to energy consumption, carbon emissions, depletion of real resources, electronic waste and the specific incentive structures. Unsustainable consensus mechanisms should only be applied on a small scale.”

The delay was welcomed by many in the crypto industry. 

“Postponing the vote is the right decision, as several critically important issues in the bill remain unresolved,” Seth Hertlein, global head of policy for Paris-based wallet manufacturer Ledger, told The Block. “The future financial competitiveness of Europe depends on getting MiCA right.”

But as Patrick Hansen, head of strategy and growth at Berlin-based Unstoppable Finance pointed out, it remains to be seen how long this process will take.

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