European Union (EU) lawmakers are discussing a possible ban on mining cryptocurrencies based on proof-of-work (PoW) mechanisms, such as Bitcoin.
Lawmakers are evaluating a regulatory proposal that could ban energy-intensive digital currencies.
The ‘Regulation on Cryptoasset Markets’ (MiCA) package, which is currently under discussion, includes a provision that could limit the use of PoW in all 27 EU member states, the media outlet indicated, Coindesk reported.
“A proposed provision seeks to ban crypto services that rely on environmentally unsustainable consensus mechanisms from January 2025,” the news portal said.
The draft specifically references PoW, which is used to mint popular cryptocurrencies such as Bitcoin and Ethereum.
The latest modifications and extensions to the MiCA draft, reviewed by CoinDesk, suggest that the regulatory framework could include a clause on cryptocurrency mining.
PoW cryptocurrency mining has been under the radar of regulators around the world in recent months due to its impact to the environment.
The ‘Regulation on Cryptoasset Markets’ (MiCA) package was originally proposed in 2020 as part of the European Commission’s Digital Finance package. The document spent much of last year under review by the European Council, the European Central Bank (ECB) and the European Protection Supervisor.
The proposal covers a number of issues related to digital assets, including a classification for digital assets and stable currencies. It also establishes rules for cryptocurrency issuers and service providers. However, a number of analysts have pointed out that the importance of the legislation lies in its potential to boost the growth of the crypto industry in Europe.
In November last year, Sweden’s financial supervisory authority called for a ban on cryptocurrency citing its high energy consumption as the main reason.
“Sweden needs the renewable energy targeted by cryptoasset producers for the climate transition of our essential services, and increased use by miners threatens our ability to comply with the Paris Agreement,” the regulator said at the time.
The call has won support from politicians in other bloc nations, including Spain, Germany and Norway.