Tuesday, September 27, 2022

European Parliament Delays Key Vote on Crypto Assets Regulation

The European Parliament, known to be the directly-elected institution in the European Union has suspended its vote on the proposed regulatory push for crypto assets after a leaked draft drew complaint about entailing a provision that attempted to ban the use of cryptocurrencies like Bitcoin and Ether in the European Union(EU) over energy problems.

A proposed regulation in the European Law, the Markets in Crypto-Assets Directive (MiCA), was up for a vote on the docket on February 28. The successful passage of the vote will bring about negotiations between the European Union Council and the European Commission thereby putting future transformation into consideration. Nonetheless, Stefan Berger, a rapporteur in charge of the vote told the Block today that the vote has been postponed.

Report from another source told the Block that the main bone of contention was the sudden controversy bordering what is generally referred to as ban-of-proof networks, a means of mining digital assets like Bitcoin with huge energy requirements.

Proof-of-work systems give room to participants to solve cryptographic puzzles (they are made up of all information previously recorded on the blockchain) thereby allowing them to add new blocks to the blockchain (or distributed database). The input of the Puzzles becomes larger over time (resulting in a more complex calculation), which makes the PoW mechanism require a vast amount of computing resources that consume a significant amount of energy.

Market In Crypto-Assets (MiCA) intends to help streamline distributed ledger technology (DLT) and Virtual asset regulation in the European Union(EU) whilst protecting users and Investors. It is also known to provide valid facts around crypto-assets; cryptocurrencies, security tokens, and stablecoins.

The general regulatory framework of crypto regulations in Europe will encompass the process of legislative regulation, distribution, circulation, and storage of cryptocurrencies. Although there is no cooperative regulatory framework regarding cryptocurrencies in the EU as of today, several administrations within the union have given numerous legal initiatives for establishing an agreement on the main issues of cryptocurrency distribution.

For the crypto-asset market to develop within the European Union, there is a need for a sound legal framework, clearly defining the regulatory treatment for all crypto assets that are not covered by existing financial service legislation.

It is the commission’s priority to make Europe fit for the digital age and to build a future-ready economy that works for the people. Complementarily, other nations including India, and Ukraine have also made bold regulations regarding digital currencies in the past months, dipping their foot directly in the nascent world of crypto.

Joyce Onose
A Blockchain enthusiast and growing writer in the space with an understanding of the importance in creating quality content for readers in the industry. Also, keen on using her skills in improving Blockchain journalism.

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