At the end of February, a ban on “energy-intensive cryptocurrencies” was in the room in the EU. At that time, quite a few feared a ban on proof-of-work-based (POW) assets. In parliament, the move was averted at the last second.
Now negotiating representatives of the EU Parliament from the camp of the Greens, the Left and the Social Democrats are bringing a POW ban back on the agenda in a trilogue with the Commission and the Council. In the worst case, the demands could lead crypto providers to discontinue support for POW-based cryptocurrencies such as Bitcoin. BTC-ECHO has the draft – and it has it partly in itself. But in turn.
The first requirement concerns the scope of information that crypto projects should comply with in their white paper. In it, according to the will of the EU Parliament, “general information on the environmental and climate impacts of a [jeden] A consensus mechanism”.
For Bitcoin, the most well-known POW-based cryptocurrency, this is problematic insofar as a subsequent change to the white paper is not possible at all. Experts are alarmed. Robert Kopitsch of the Blockchain for Europe Association warns against BTC-ECHO:
The new demands of the S&D and Greens are not only an immense effort for all parties involved, but also create new regulatory blurring, which in extreme cases could lead to the ban of some crypto assets such as Bitcoin. The initiative also goes far beyond the agreement already reached in the EU Parliament.
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Furthermore, the negotiators of the EU Parliament want to oblige crypto providers to present information about the most important negative environmental and climate impacts for each crypto asset offered “prominently” on their own platform.
In addition, the European Securities and Markets Authority is to define sustainability standards and thresholds. Originally, the adopted parliamentary draft referred to ”directives”. With the new wording, the negotiators from the camp of the Greens, the Left and the Social Democrats are raising the measures to a mandatory level.
The standards still to be defined must therefore be complied with by crypto providers if they want to operate in the EU. The platforms should also take “effective measures“ to ”adequately address negative environmental and climate impacts”. Consequently, non-compliance could lead to the exclusion of the respective cryptocurrency from the trading venues.
In the April issue of BTC-ECHO magazine, we summarized the prohibition drama around Bitcoin. At that time, it was clear that the negotiations were less constructive, but much more ideological in nature. So it seems this time too. The extent to which the new demands are coordinated with the rest of Parliament remains open. However, it seems that the prohibition faction around the Greens, the Left and the Social Democrats are still trying to turn the defeat in the parliamentary vote in the trialogue into an ideological victory. Whether this will also succeed remains to be seen. The trilogue negotiations will take place today, June 14.
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The BTC-ECHO magazine is the leading German-language magazine since 2014 on the topics of Bitcoin, blockchain, NFTs & cryptocurrencies.
