Key ideas:
- EU lawmakers will vote today on MiCA that could restrict PoW cryptocurrencies.
- The Russian invasion of Ukraine has accelerated Mica's pace.
- Non-EU countries will need to follow the US and the EU with a stronger regulatory framework.
Concerns about Russians evading sanctions through crypto have accelerated the approval of the regulatory framework of the Markets of Cryptoassets (MiCA) of the EU.
EU Lawmarkets will vote for MiCA
Today, the EU legislators vote in my CA. Legislators have been working on MiCA for some time. Russia's invasion of Ukraine and that of US President Biden executive order has accelerated the progress of MiCA until today's vote.
While markets have anticipated increased regulatory oversight, proof-of-work (PoW) cryptocurrencies have only become a target in recent months.
Initially, MiCA had included language prohibiting digital assets with environmentally unsustainable protocols including crypto PoWs. While the language in the latest draft is milder, lawmakers have continued to target PoW cryptocurrencies.
According to the media reports the latest draft sets,
โCrypto-assets will be subject to minimum environmental sustainability standards regarding their consensus mechanism used to validate transactions, before being issued, offered or admitted to trading in the Union.โ
The above language points to Bitcoin (BTC), Ethereal (ETH), and others.
The MiCA vote comes after calls from ECB President Christine Lagarde to vote through the framework.
MiCA could satisfy calls to ban proof-of-work mining
Last month, ECB President Christine Lagarde managed the media in an Informal Meeting of Ministers of Economy and Finance live.
At the live event, Lagarde stated:
"The ECB and all national central banks of the euro system will decisively and rigorously implement all sanctions decided by the EU and European governments."
During the question and answer session, Lagarde had asked lawmakers to move forward on a proposed regulatory framework for digital assets known as MiCA. The ECB president pointed out that there are always criminal ways to circumvent a ban.
For that very reason, Lagarde stressed that it is vitally important to push MiCA as quickly as possible to provide a regulatory framework.
Lagarde also said:
โIt's great to be in crypto, but that's not all. You have to move from cryptocurrencies to stablecoins and finally to fiat currencies. There are now ways, whether it's DLT or not, to lift that veil and make sure criminal activity is actually prosecuted and dealt with properly."
The ECB President's press for MiCA and comments responded to questions about Russia evading sanctions by using crypto.
Lagarde has not been alone in calling for an EU regulatory framework for cryptocurrencies.
In January, the vice president of the European Securities and Markets Authority (ESMA), Erik Thedeen called to ban PoW mining. The Vice President spoke about the risks that PoW mining poses to the environment.
A similar call came from the Governor of the Hungarian Central Bank, Gyorgy Matolscy, in February. matolicia proposed a Europe-wide ban on cryptocurrency trading and mining.
With lawmakers under pressure to ensure that Russia cannot evade sanctions through the crypto market, today's vote will generate a lot of interest and scrutiny.
The timing of the vote coincides with news from Russia trading crypto to the United Arab Emirates to evade sanctions.
