There’s been a lot of talk around the famous Bitcoin ban in the EU. However, what’s really going to happen, and will it ban Bitcoin?
The fact that Bitcoin and the crypto market full of OKX automation are currently keeping EU officials very busy is clear, not least since a committee vote in mid-March.
A controversial passage that would have de facto banned trading in energy-intensive cryptocurrencies like Bitcoin in the EU failed in the EU committee. Currently, a report is making waves, which, based on leaked documents, once again raises the possibility of a Bitcoin ban.
However, the published minutes of the talks all date back to the time before the March vote. Some of the discussions already took place in November.
Some of the arguments that were finally discussed by the Economic Affairs Committee appear in these minutes. Swedish and German authorities are considered to be the driving forces here, warning once again about the high energy consumption of Bitcoin production and actually considering a ban on crypto mining.
Mining Ban in Europe
According to the documents, the participants immediately give themselves the answer as to whether such a ban would realistically contribute anything to Bitcoin’s ecological footprint.
“The direct ecological impact on a ban would probably be low or zero,” is quoted from the February minutes referred to by Medium. Europe represents only ten percent of the world’s mining capacity, it said.
Moreover, the ban in China has shown that miners can change their locality very quickly, it said.
What is still in the works, however, according to the document, is an EU-wide directive on energy efficiency. Data centers and thus probably also mining sites could have to show their energy balance in the future.
If the EU-wide energy labels for server farms come, this would make the power consumption transparent with regard to Bitcoin production. The promises made in many places by the industry that they would switch to renewable energy or only use energy surpluses anyway would also be put to the test.
End for Trading with Bitcoin?
More relevant for Bitcoin owners anyway, however, are the considerations to ban trading with Bitcoin and other cryptocurrencies based on the computationally intensive proof-of-work mechanism.
The answer to that very question is redacted in the November minutes. At least some of the EU officials are likely to have little concern about the implications for Bitcoin holders in the EU: Those who hold Bitcoin, they say, are aware of the currency’s volatility and investment risk. Consequently, protective measures are “not necessary.”
The demand that Bitcoin should do the same as Ethereum and switch to the more energy-saving “proof of stake” method is also considered completely unrealistic in the crypto scene.
Even the participants of the February meeting came to the conclusion that such a process would be very complicated and would probably take years, as can currently be seen with Ethereum.
Unlike the world’s second-largest cryptocurrency around founder Vitalik Buterin, Bitcoin is not backed by a comparable development team that would drive forward a development demanded by the EU.
In reality, the demand would actually lead to a Bitcoin ban in the EU in the final analysis. Of course, Bitcoin owners would still be able to send and sell their coins and also re-buy the cryptocurrency.
But they would have to rely on foreign, unregulated crypto platforms and other channels to do so. Apart from the actual damage to EU-based crypto companies, it seems hardly plausible that it would be in the EU’s interest if citizens were to switch to less secure, unregulated providers.