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Blog posts, Company, Thought leadership | 03/11/2022

Stand For Financial Freedom: Our Position on MiCA’s Proof of Work Ban

On Monday, March 14th, the European Parliament ECON Committee will vote on MiCA, the comprehensive crypto regulatory proposal for Europe. At the last possible moment certain parties offered amendments to MiCA that would ban Proof of Work consensus protocols, such as Bitcoin, Ethereum, and other popular blockchains and crypto assets in Europe, issuing an ultimatum to the rest of Parliament: “accept our bitcoin ban or we will oppose the entire MiCA package.”

Individuals and organizations should be free to choose the technology most appropriate to their needs. Policymakers should neither impose nor discriminate in favor of a particular technology. This is deeply concerning and would have serious consequences for Europe.

Here’s why: 

  1. The innovative and growing digital asset economy in Europe will vanish. Without Bitcoin and Ethereum, crypto exchanges and other crypto service providers cannot operate profitably. They will be forced to close, move, or block access to Europeans. DeFi protocols dependent on ETH will not be able to legally serve Europeans. Let’s be clear, this activity won’t stop, it will simply move to the United States or Asia, where it is currently welcomed. For example, U.S. President Biden just this week signed an Executive Order stating: 

We must reinforce United States leadership in the global financial system and in technological and economic competitiveness, including through the responsible development of payment innovations and digital assets.  The United States has an interest in ensuring that it remains at the forefront of responsible development and design of digital assets and the technology that underpins new forms of payments and capital flows in the international financial system[.] Continued United States leadership in the global financial system will sustain United States financial power and promote United States economic interests.

Europe’s loss will be the United State’s gain, and through MiCA, Europe will permanently cede the leadership and control of Web3 to the U.S., just as it did with Web2, which remains dominated by a handful of U.S. tech giants. 

It is crucial that Europe stays in the innovation race and takes the chance to build the champions and leaders of the Web3 world to come, creating thousands of jobs in the process. 

  1. Consumer protection will be harmed by a bitcoin ban in Europe. Due to the nature of digital assets, even if ‘banned’ digital assets will remain available in Europe, just not on safe and regulated EU platforms. This would present severe consumer protection concerns as consumers will be forced to access foreign platforms that may be hard to understand and have less (or no) regulatory oversight.

As a French founded and European business, we at Ledger will always protect freedom and self-custody, particularly in our backyard. That is why we are calling on YOU to contact your Member of European Parliament (MEP) and let them know that you oppose a Bitcoin ban in Europe. Here is how:

  1. Look up your MEP here.
  1. E-mail, call or tweet your MEP and tell them: 

“An outright ban of proof-of-work assets will cripple the EU market, encourage circumvention of law, worsen consumer protection, and push the industry outside the EU – all with no benefit to the environment! Please ask the ECON Committee to oppose Amendments ALT A and ALT G.”

For more information on the proposed proof-of-work ban, we recommend this report prepared by the ADAN.

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