The European Parliament voted 30-23 against a proposal that would have essentially made Bitcoin illegal in the EU. In the vote, Members of the European Parliament (MEPs), voted against a proposal to ban proof of work cryptocurrencies such as Bitcoin.
The Proposed Ban
The proposed ban would have forced anyone mining cryptocurrencies using PoW to move out of the EU; it faced serious opposition from the crypto world. It would have essentially destroyed the EU’s budding crypto industry by making it unprofitable for anyone to operate a crypto business.
While the EU’s concerns were genuine, a blanket ban on PoW coins would have created more problems than solutions. One of the issues it would have created was that it would have driven the crypto sector underground instead of eliminating it. Consequently, it would have made it harder to protect genuine traders. At the same time, it would have made it harder to track down nefarious activities in the sector.
The Expected Outcome of the Ban
If it had passed, it would have seen the EU move from the PoW crypto coins to Proof of Stake coins. The thinking was that PoS uses less energy to validate transactions. While PoS is already showing huge benefits over the PoW model, the EU wanted to force it through the law to become the standard.
The only issue with the proposed ban is that the EU contributes only a small portion of the energy needed to mine BTC. This is because most of the BTC mining in the world takes place outside the EU. Until recently, close to 70% of the BTC hash rate was located in China until the government there began cracking down on the sector. Since then, miners have been looking to set up operations in other places around the world. However, due to the high cost of electricity within the EU, it has not been a prime candidate for such activities.
The Ban Could Still Come Back
Because of the complexity of the EU’s lawmaking process, the ban on PoW could still come back. According to one Twitter user, the group that lost the vote could still bring up the issue during negotiations. Patrick Hansen, the head of strategy at Unstoppable Finance also noted that the issue could still come up again during data center regulation discussions. Consequently, while those in the crypto world can rest easy for now, it could still be a major issue in a few months.
Being such a huge economy, a ban on Bitcoin in the EU would have an effect. While trading would likely continue, it would mean that mainstream adoption would never happen within the EU. However, it is worth noting that the EU is not proposing a blanket ban on crypto, but only a ban on PoW crypto coins. If it does happen, one of the beneficiaries would be ETH, which is still currently working on migrating to the PoS model.
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