The European Parliament will soon begin debates on regulating the cryptocurrency market. The main focus will be on the provisions of MiCA, a document regulating the use of digital assets in the European Union.
A ban on cryptocurrency mining
The European Parliament will vote on MiCA‘s legislation to regulate the cryptocurrency market. The vote will take place in March after the final bill is submitted.
In a Monday tweet, Stefan Berger, a member of the European Parliament’s Committee on Economic and Monetary Affairs, assured that a provision interpreted by many as a ban on mining cryptocurrencies using the Proof of Work (PoW) algorithm had been removed from the document. This algorithm – let’s recall – is a mechanism that protects a distributed ledger of cryptocurrencies from unwanted modifications and, at the same time, allows the addition of more transactions to a blockchain network.
MiCA to set global standards
MiCA could become a benchmark for other similar documents aimed at regulating the cryptocurrency market. Hence Berger’s appeal to other members of parliament to support the bill.
Strong support for the MiCA will equate to an open, technology-neutral, and innovation-friendly attitude towards the financial sector. The regulation will provide legal security for all market participants by, among other things, establishing “credible supervisory structures.”
Institutional control is needed, especially for the amount of electricity mined. After the vote, the bill will be discussed with the European Council and the European Commission.
The history of MiCA
The MiCA Act, which aims to create an EU-wide legal framework for the cryptocurrency market, first became a topic of discussion in September 2020. In November 2021, it was adopted by the European Council, recognizing the benefits of its possible implementation.
Passing the MiCA would provide security for investors and stabilize the currently shaky market. The vote was originally scheduled to take place on Feb. 28 but was postponed to March at Berger’s initiative due to the need to discuss the “matter of PoW further.”