My 2 Sats: EU votes in favor of Crypto

My 2 Sats: EU votes in favor of Crypto

My 2 Sats: EU votes in favor of Crypto

In a satisfying turn of events, the European Union appears to be taking a more friendly stance on crypto. Just a few days ago the European Parliament’s Committee on Economic and Monetary Affairs, ECON for short, voted against a provision that would have outlawed cryptocurrency mining in the EU.

The provision was part of the larger Markets in Crypto Asset Regulation legislation, a wide-reaching directive aimed at creating a unified regulatory environment for crypto in the EU.

According to the document the legislation is designed to, “further enable and support the potential of digital finance in terms of innovation and competition while mitigating the risks.” Furthermore, the legislation aims, “to ensure that the EU embraces the digital revolution and drives it with innovative European firms in the lead, making the benefits of digital finance available to European consumers and businesses.”

Last week we released an article about Biden’s executive order on crypto. That order contained similar wording in that it tasked regulators with creating a fair, open environment that will allow the blockchain industry to flourish in America.

It’s almost like the major western countries are waking up to something the crypto community has already known for years: blockchain technology and digital assets will be as big as the internet. That being the case, countries should try and figure out how they can encourage this rapidly growing industry to stay in, or move to, their jurisdiction.

For example, Europe missed out on Microsoft, Facebook and Google, and many other of the largest tech companies in the world. Given the chance, the EU probably doesn’t want to make the same mistake twice.

The heads of government in Germany, France and the Netherlands might be imagining a blockchain industry centered in Europe, rather than America. This type of thinking could lead to the best type of positive competition; nation-states fighting to have the most tolerant crypto policies and encouraging green energy production, rather than trying to ban mining.

A ban on crypto mining is also a bit of a red herring. As Layah Heilpern mentions in this video, although Bitcoin consumes an estimated 0.55% of global electricity, about 39% of that is surplus energy that comes from renewable sources, which would have otherwise been wasted anyway due to the difficulty of “transporting” energy from source.

Furthermore, Bitcoin mining can help subsidize the buildout of green energy sources like solar and wind.

Portable Bitcoin mining rigs can even use excess natural gas so that it doesn’t get flared off into the atmosphere, a practice that has two benefits. First off, it’s more environmentally friendly to burn the natural gas in a generator, rather than flare it. Second, it helps oil and gas companies to make more money on their wells, which can encourage more drilling.

Domestic production of petroleum will become increasingly important as supply lines from Russia are closed.

A portable Bitcoin mining rig - IMG Source

All in all the European ECON council probably made the right choice to strike the mining ban from the legislation, and we’re happy that lawmakers are taking a more positive stance towards crypto both in the EU and the USA.

But also, PoW miners have a responsibility to continue trying to source their energy from green sources. This will make Bitcoin even more secure and sustainable in the long term.

This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.

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