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Crypto news: EU rejects PoW ban following backlash


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Peter Shiff, a critic of cryptocurrencies, pointed out that BTC’s performance did not live up to its reputation as an inflation hedge – Photo: ShutterStock.

The European Parliament has voted against a controversial proposal to outlaw all Proof-of-Work (PoW) amid widespread backlash. 

EU MP Ondrej Kovarik, who serves on the Committee on Economic and Monetary Affairs (Econ), praised the decision by saying: "At Econ, we have just rejected a proposal calling for a ban on crypto trade, such as bitcoin in the EU. It is very good news and a victory of common sense."

On Monday afternoon, the proposal document Markets in crypto-assets regulation (MICA) stated: “The proposal includes an Crypto-asset providers shall not provide services related in any way, shape, or form to crypto-assets that do not meet the environmental sustainability criteria in accordance with Article 3a.

“In particular, they shall not facilitate the purchase or trading of such crypto-assets and shall not offer custody services for such crypto-assets.”

Econ was looking into mining, purchase and trading of PoW cryptocurrencies and concerns due to environmental demands of PoW technology. But as the majority of main virtual coins, including bitcoin, ethereum, run on PoW consensus, such a ban would have far-reaching consequences and become the subject of market-wide criticism.

The ban was ultimately rejected.

Head-to-head

Cryptocurrency bulls, Elon Musk and Michael Saylor, are sticking to their guns and holding crypto assets in the inflationary environment, while economist and cryptocritic Peter Shiff warns against using BTC as inflation hedge, and author of Rich Dad Poor Dad, Robert Kiyosaki has changed his mind about digital assets.

Musk, the founder and chief executive at electric car maker, Tesla, asked on Twitter for people's thoughts regarding the inflation rate over the next few years. In response, chief executive of MicroStrategy, the biggest corporate owner of BTC, Michael Saylor predicted that as inflation will run near all-time highs, “capital from cash, debt, and value stocks to scarce property like BTC will intensify.”

“It is not entirely unpredictable that you would reach that conclusion,” Musk replied, and added that he believed it was better to own physical assets like houses in a high inflation environment. “I still own & won’t sell my bitcoin, ethereum or doge for what it's worth,” he added.

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Separately, Kiyosaki came forward to say that due to high inflation “BEST INVESTMENT may be stocking products you will always use such as toilet paper, trash bags, canned goods, frozen foods, gold, silver, bitcoin.”

Just a couple days prior, Kiyosaki proclaimed that cryptocurrency was over. “BYE-BYE BITCOIN:  Prediction. Biden to sign EXECUTIVE ORDER regulating Cryptos. NEXT: Fed Crypto. NEXT: all crypto currencies seized & folded into GOVERNMENT crypto,” Kiyosaki wrote last week.

Peter Shiff, economist, financial broker, and a longtime critic of cryptocurrencies, on the other hand, has pointed out that BTC's performance did not live up to its reputation as an inflation hedge over the last two years.

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As of 11:30 GMT

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  • Wavew (WAVES), zcash (ZEC)  terra (LUNA) gained 44%, 43% and 15% week-on-week.
  • Fantom (FTM), on the other hand, lost 20% over the last seven days of trading.

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