Finally, a proof of work ban is off the table in Europe

The lead politician responsible for the MiCA report in the EU Parliament has announced that a proof of work ban is now officially off the table. The MiCA report has been allowed through a crucial step in the European Parliamentary system. The report’s commission & council did not challenge Stefan Berger’s mandate, and therefore the report continues without a proof of work ban.

#MiCA: Gute Nachricht! Mein Mandat wird NICHT gechallenged. Ich werde nun in die Trilog-Verhandlungen gehen mit der Position, dass es keinen #PoW-Ban geben wird. Das EU-Parlament gibt mir Rückenwind & zeigt Innovationskraft /1

— Stefan Berger (@DrStefanBerger) March 25, 2022

Translation: “Good news! My mandate is NOT challenged. I will now go into the trilogue negotiations with the position that there will be no #PoW ban. The EU Parliament gives me tailwind & shows innovative strength “

Further, the current version of the report includes a proposal to connect MiCA to the EU Taxonomy for Sustainable Finance. Suppose this is accepted, which Berger is “optimistic” about; it is doubtful we will see any PoW bans in Europe. In that case, crypto could be officially recognized as an “environmentally (un)sustainable economic [activity],” according to Patrick Hansen of UnstoppableDeFi. The addition may lead to potential issues for those wishing to invest in crypto mining but would not necessarily ban the technology outright. The taxonomy is, 

“a transparency tool based on a classification system translating the EU’s climate and environmental objectives into criteria for specific economic activities for private investment purposes.”

It is not a mandatory list of activities. Therefore, if the European Parliament adds crypto mining to the taxonomy, we will unlikely see exchanges forced to delist PoW coins like Bitcoin. Instead, there may be pressure for investors in crypto mining to focus on sustainable sources of energy to offset the new classification. It seems like a massive win for all involved as, of course, mining should use the cleanest forms of energy available. For example, no one wants companies to mine Bitcoin from dirty coal power plants. However, the efficient and direct transfer of energy to money through crypto mining is something I personally believe is much more sustainable than the current financial system.