This mural by Pascal Boyart in Paris in 2019 hides a bitcoin reward for the first person proficient enough to solve a visual puzzle. Credit: Twitter/@pascalboyart
France-based hardware wallet maker Ledger has issued a warning about a potential EU-wide ban on cryptocurrency assets using the Proof of Work (PoW) consensus mechanism, calling on people to contact members of the European Parliament (MEP) and oppose the move.
"At the last minute, certain parties have proposed amendments to the MiCA [regulation on Markets in Crypto Assets] which would ban proof-of-work consensus protocols such as Bitcoin, Ether and other popular blockchain and cryptocurrency assets in Europe, issuing an ultimatum to the rest of Parliament: "Accept our Bitcoin ban or we will oppose the entire MiCA package," said one of the key players in the cryptocurrency industry.
(Ether, the second-largest cryptocurrency asset by market capitalization, aims to move to a proof-of-stake consensus mechanism that does not require energy-intensive mining, but critics say it is more centralized and less secure.)
The European Parliament's Economic and Monetary Affairs Committee (ECON) will vote on the MiCA on Monday, March 14.
However, according to Patrick Hansen, head of strategy and growth at DeFi wallet developer Unstoppable Finance, MEPs will vote on two proposals, one of which "is not going to be banned.
“There seems to be very little opposition to the ban right now, but [to be determined],” Hansen said.
As reported earlier this month, the European Commission's draft MiCA, first proposed in September 2020, was amended to remove language proposing a ban on PoW-based cryptocurrency assets.
However, even after ECON voted to ban these cryptocurrency assets and the European Parliament (EP) later confirmed this, long and complex negotiations are expected between the European Parliament, the European Commission and EU member states. It could take years for the MiCA to enter into force.
In either case, Ledger warns that if the ban is confirmed, then.
- “Europe’s innovative and growing digital asset economy will disappear. Without bitcoin and ethereum, cryptocurrency exchanges and other cryptocurrency service providers will not be able to make a profit. They will be forced to shut down, move or block access to Europeans. The DeFi protocol, which relies on ETH, will not be able to legally serve Europeans. Let’s be clear, this activity will not stop, it will only move to the US or Asia where it is currently popular.
- “A bitcoin ban in Europe would undermine consumer protection. Due to the nature of digital assets, even ‘banned’ digital assets would still be available in Europe, just not on secure and regulated EU platforms. This would raise serious consumer protection concerns as consumers would be forced to access foreign platforms that may be difficult to understand and have less (or no) regulatory oversight.”
The company urges the European cryptocurrency community to contact their MEPs and tell them.
“An outright ban on workload certification assets would weaken the EU market, encourage circumvention of the law, worsen consumer protection and push the industry outside the EU – all of which are not good for the environment Please ask the Economic Commission to oppose amendments ALT A and ALT G. “
The MEPs who proposed the ban claim that the PoW mechanism is environmentally unsustainable.
"If each of us must defend a more ecological and ethical society, then banning POWs is a simplistic and ironic view," responded Pierre Perce, a member of the National Assembly of Paris' 6th constituency. "The problem is not the energy consumption of Bitcoin, but the source of this energy. It is more important to ban extraction from fossil energy sources and encourage players to shift to excess renewable energy sources in order to increase the profitability of these means of production."
According to Person, instead of protecting EU citizens, MEPs are pushing for a ban that “is hurting our competitiveness, while President Biden signed a bill calling for full U.S. acceptance of this new ecosystem.”
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