Crypto Influencer Explains Ramifications of a Potential EU Ban of PoW Cryptocurrencies
On Sunday (March 13), crypto educator and influencer Heidi Chakos (@blockchainchick on Twitter), who is the of the YouTube channel “Crypto Tips”, explained how crypto investors might get affected by today’s upcoming vote in the EU parliament on the latest draft of Markets in Crypto Assets (MiCA), which is a regulatory framework for digital assets.
This is the part of the MiCA framework that has the crypto community worried:
“Crypto assets shall be subject to minimum environmental sustainability standards with respect to their consensus mechanism used for validating transactions, before being issued, offered or admitted to trading in the Union.“
Here is what Heidi had to say on this subject:
“They’ve been trying to pass this law or this legislation that has language about cryptocurrencies in it. A few weeks ago, they were talking about banning proof of work specifically — cryptocurrencies that use that type of consensus mechanism –and then they took it out and now they put it kind of back in but a lot more broadly.
“So I think this is really strategic because now they’re not limited to just potentially banning proof of work blockchains. These are these regulations that they’re trying to impart on Europeans [for] cryptocurrencies that aren’t sustainable enough, cryptocurrencies that are being deemed bad for the environment, aren’t as green…
“So what does this mean for people in Europe for people, for people who want to launch a cryptocurrency within Europe? You know, their language is if a cryptocurrency is not up to their code of standard for this sustainability practices, it won’t be offered on exchanges that function within European Union.“
“So what does that mean for you as a user?… Maybe you have an account on on Binance and they’re going make sure that you go through KYC and if you have ID that’s saying that you’re a European resident or European citizen, suddenly you can’t buy or trade Bitcoin or Ethereum — that is huge. It’s alarming and it’s going suck for anyone who doesn’t know how to use a decentralized exchange... There’s so many different decentralized exchanges options. Liquidity is no longer an issue there.“
“Also, getting back to the broad strokes, they’re not saying specifically proof of work. There are a lot of other cryptocurrencies that might not be as green as they would like. And it’s not a proof of work — maybe it is proof of stake.
There’s a lot to say about Solana and the computing power required to manage all of those super fast and cheap transactions that they’re manufacturing. It requires a pretty heavy load computing power-wise.“
Jake Chervinsky, who is Executive Vice President and Head of Policy at Blockchain Association, says that a EU ban on cryptoassets that use Proof-of-Work (PoW) consensus could encourage them to try to ban cryptoassets that use Proof-of-Stake (PoS).
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.
Featured Image by “vjkombajn” via Pixabay.com