Regulatory overview – Is BTC threatening to end in the EU?3 min read
Just days before the invasion of Ukraine, the month-long debate over Russia’s crypto price has come to an end. Because according to a draft law of February 21, BTC and Co. will not be completely banned in Russia. According to the will of the Ministry of Finance, they will at least remain permissible as investment vehicles. However, strict regulations are planned for dealing with cryptocurrencies. The government subjects all trading exchanges to a strict license requirement, for private investors the annual investment volume may not exceed the equivalent of around 6,800 euros. Institutional investors, on the other hand, are not affected by this limit. Mining should also remain legal in Russia.
In the light of recent developments, the last point is particularly interesting. Because in view of the impending sanctions against the Kremlin, at least Tom Robinson, from the blockchain analysis company, believes so Ellipticthat Russia will increasingly resort to mining BTC and Co. in the future. “Cryptocurrency mining offers Russia an opportunity to monetize its oil and gas reserves in the global market, even though Russia is unable to physically export them,” Robinson said Washington Post.
EU considers proof-of-work ban
Proof-of-Work is the consensus mechanism behind BTC and many other cryptocurrencies. Although it ensures trust in the decentralized payment network, it is associated with high energy consumption, especially in the case of BTC mining. So could it soon be banned in the EU? At least that’s what the final draft of the European MiCA guidelines wants. The European Parliament would therefore like to ban all those crypto services that are based on “ecologically unsustainable consensus mechanisms”.
According to this, EU parliamentarians from the Greens, the SPD and the Left have actively supported this passage. The proposal was due to be voted on on February 28th. The responsible chairman of the Committee on Economics and Currencies (ECON), Stefan Berger, had suspended this appointment due to the strong headwind from the crypto community in order to revise the paper again. It is still unclear when the vote will be rescheduled. However, even after the vote in Parliament, a final decision will require the approval of the European Commission and member states.
Kazakhstan closes 13 illegal mining facilities
The energy consumption of BTC mining has remained a hot topic in Kazakhstan over the past week. Unlike in the EU, however, this is less about the ecological aspect and more about questions of energy supply. After all, Kazakhstan has become the second largest mining location in the world in recent months. But in the course of ongoing power shortages, the Central Asian country had to tighten the thumbscrews for miners. In addition to higher energy costs, the new government course also includes consistent action against illegal mining of BTC. On February 21, the Kazakh authorities therefore stopped operations in 13 unauthorized plants. The total consumption of the switched off devices amounts to 202 megawatt hours. Kazakhstan wants to formulate a binding legal framework for mining by April.
Spanish central bank wants strict BTC rate
The question of whether BTC and Co. threaten the financial system is also a concern for Spain’s monetary authorities. Because Pablo Hernández de Cos, governor of the Spanish central bank, called for a harder crypto course last week. The crypto-related risks can only be dealt with through regulation, according to the original statement of his speech on February 21. At the same time, de Cos named cryptocurrencies as a possible growth catalyst for the rest of the financial system.
Mexican senator dreams of a BTC course like in El Salvador
Indira Kempis, Mexican Senator for the State of Nuevo León, has BTC fever. After she was in El Salvador a few weeks ago and experienced the consequences of the introduction of BTC as the national currency at first hand, she wishes for a similar development for Mexico. According to a local media report on February 21, Kempis intends to submit a bill to the Senate later this year. Kempis believes that legalizing BTC could help it be included in the financial system. In addition, it also promises economic benefits.
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