Bitcoin has been saved from being deemed illegal in the European Union by 2025 by a close call vote. But what does this victory for crypto mean for investors?
Monday's close shave in the EU saw members of the EU parliament vote to reject a clause that would have crippled bitcoin (BTC-USD) mining within the bloc.
The move has been seen as a clear signal that the EU wishes to support the development of the industry.
The decision by the EU to adopt an "innovation-friendly crypto-regulation" will have far-reaching consequences for the sector and for Europe's place within it.
Patrick Hansen head of strategy at Unstoppable Defi tweeted: "This is a big relief and political success for the bitcoin and crypto community in the EU."
Hansen added that if the bill had have gone through with the anti-proof of work amendment it would have "killed the competitiveness of EU crypto businesses would have driven capital and talent along with these companies out of the EU".
Renewable energy specialist Lorenzo Vallecchi said that the most relevant part of the proposal for investors is the possible inclusion of proof-of-work into the EU sustainable finance taxonomy at a future date.
He said that if this did happen then "bitcoin mining would be among the officially classified green activities and would drive public EU money and guide large institutional investors towards it".
In a Twitter thread he said that even if bitcoin mining was not included in the EU's sustainable finance taxonomy, "it would still be a totally legit investment and would probably be included later, as it becomes clear that proof of work is an enabling factor for flexible grids, renewables and the electrification of everything".
Immediately after the vote result was announced bitcoin bull and CEO of MicroStrategy tweeted that it reinforced "support for bitcoin that is growing around the world".
But, it was a close shave as the anti-proof-of-work amendment to the Markets in Crypto Assets (MiCA) bill had a paragraph that insisted on the phasing out of the energy-intensive proof-of-work consensus mechanism.
Miners of bitcoin and ethereum (ETH-USD) use proof-of-work to validate transactions on the blockchain.
This clause took aim at the proof-of-work method due to environmental concerns because of the large amount of electrical power needed to run the required computer processors.
However, members of the European Parliament voted against this version of MiCA that would have effectively banned bitcoin mining within the bloc.
The EU Committee on Economic and Monetary Affairs (ECON) leader Stefan Berger said: “By adopting the MiCA report, the European Parliament has paved the way for an innovation-friendly crypto-regulation that can set standards worldwide.
“The regulation being created is pioneering in terms of innovation, consumer protection, legal certainty and the establishment of reliable supervisory structures in the field of crypto-assets.
"Many countries around the world will now take a close look at MiCA."
Speaking to the bloc, a representative of the ECON committee leader said: "The Greens and Socialists attempt to ban proof of work failed.
"The crypto-friendly proposal of Dr Berger MEP was adopted."
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Marcus Sotiriou, analyst at the UK based digital asset broker GlobalBlock told Yahoo Finance UK the move to reject the ban was "a huge relief for the industry" and that it would pave the way for future crypto regulation in the bloc.
Will Hamilton, head of trading and research at Trovio Capital Management said: "After weeks of debates and delays, a majority of the EU parliament has voted against banning the use of proof of work digital assets including bitcoin and ethereum.
Read more: Bitcoin: EU votes against crypto ban
"Controversy arose following the reinstatement of a line concerning the 'minimum environmental sustainability of crypto mining' that had previously been removed.
"If passed, the excerpt would have required blockchain operators to submit a rollout plan detailing how they will achieve environmental sustainability compliance.
"Failure to submit a plan may prohibit coins from being mined or traded in the EU."