Why BTC shouldn’t be afraid of EU regulation?
- Posted on June 9, 2022
As the EU finalizes the regulatory framework for crypto assets, is Bitcoin a cause for concern?
This afternoon, the European Parliament committee will vote on the final version of the draft on cryptoassets submitted last week.
As we mentioned in our previous article, digital assets issued and/or traded in the EU “must comply with minimum environmental sustainability standards and have a phased implementation plan established and maintained to ensure compliance” with these requirements.
The choice between proof-of-work and proof-of-stake will also be threatened; the former is a typical Bitcoin consensus mechanism, while the latter is based on validating evidence that it consumes less energy and is what Ethereum takes by implementing its layer 2 direction. The EU is moving towards energy sustainability, therefore, it supports the PoS mechanism instead of PoW.
Additionally, the draft would require the European Central Bank to “create uniform rules for providers and issuers of crypto-asset services at EU level.”
So is Bitcoin really risky?
The panic was sparked after an article was published on Coindesk over the weekend. However, some clarifications are necessary, which could greatly reduce the concerns associated with the possible ratification of the amendment.
First, we note that voting refers to passing a bill, which will be voted on by the European Parliament.
Bitcoin speculator and crypto influencer Marco Cavicchioli pointed to the important fact that “draft rapporteur Stefan Berger said he had submitted the final draft on March 7. Instead, the amendment for PoW was deposited by Sven Giegolg, he has not been a member of the European Parliament for two months.”
Therefore, it is almost impossible for the bill to pose any real threat to the world’s largest cryptocurrency. In fact, the trend in recent days seems to have more to do with the international tension in the situation in Ukraine than with a possible ban at the European level.
price fluctuation
At press time, Bitcoin was trading at $38,822.70, up 2.64%.
As the EU finalizes the regulatory framework for crypto assets, is Bitcoin a cause for concern?