Official at the ECB proposes a ban on tokens that have an ‘excessive environmental footprint’
Officials from the EU have rejected a ban on crypto mining. However, the Markets in Crypto Assets bill could mandate that firms report any possible environmental impact. News Own this piece in crypto history. Collect this article as NFTFabio Panetta (executive board member of European Central Bank) suggested that crypto assets with a significant environment impact be banned. However, the Markets in Crypto Assets bill could require firms to report any potential environmental impacts. Panetta stated that harmonizing taxation regarding crypto between global jurisdictions could help address some of the environmental and energy costs associated with mining and validation. Panetta also stated that tokens with an “excessive ecological footprint should be banned”, referring to proof of work assets in a citation. Panetta said crypto markets were at risk because of their “incredibly high leverage” and interconnections. He also cited the collapse of FTX as an example. Panetta also stated that the inept governance of crypto firms has only magnified these structural flaws. The implosion at FTX exposed the weaknesses in the accounting systems and risk management, as well as the lack of transparency and disclosure. This event could lead to crypto-assets moving away from centralised to centralised exchanges, creating new risk owing to the lack of a central governance organization.” Fabio Panetta, Executive Board member, at the @LBS Insight Summit 2022. Crypto-assets do not represent money. Many are just a new way of gambling https://t.co/S3YOJcq9QM1/4 pic.twitter.com/2VmYAtWGja– European Central Bank (@ecb) December 7, 2022
After extensive discussions, the European Parliament Committee on Economic and Monetary Affairs approved the Markets in Crypto Assets bill (or MiCA) in October. The crypto framework awaits final approval following legal and linguistic checks by EU lawmakers, with many expecting the policy to go into effect starting in 2024.Related: How blockchain technology is used to save the environmentAssociating cryptocurrency transactions and mining operations with environmental concerns has often been a rallying point for global policymakers. The New York state legislature approved a two-year moratorium for crypto miners who use fossil-fuel power plants. EU officials had rejected a ban on crypto mining. However, MiCA could require firms reporting any environmental impacts.