The European Union’s generally positive policies toward the bitcoin industry are expected to remain under the incoming European parliament. 185 million people from 27 member states of the EU participated in last week’s elections to select the new European Parliament. The rise of the far-right, the strengthening of the European People’s Party (EPP), and the fall of the Greens/European Free Alliance (Greens/EFA) have all contributed to a transformation of the European political landscape. Since sovereign nations approach sensitive issues differently, the EU faces the challenging task of politically satisfying the complexity of the continent as a whole. Examples of these issues include the distribution of EU grants, immigration and asylum policy, climate change and energy transition, or developing a common defense strategy.
Europe has been able to meet some of the demands of the blockchain and cryptocurrency industries in spite of this complicated political landscape. Will the recently elected EU Parliament support crypto regulation? The analysis of the election’s aftermath has been discussed by the European crypto community.With 189 MPs in the EU Parliament, the EPP is the biggest and most powerful group in the European Parliament. Since the EPP “often has a more pragmatic and technology-neutral approach to regulation,” German MEP Markus Ferber of the party says he thinks the crypto industry will be stabilized by the surge of 13 seats over the previous EU elections.
Ferber clarified that the EPP’s risk-based methodology, which considers use cases in addition to the underlying technology, is the foundation for its technological neutrality. According to him, there has been a big change in the EU Parliament that might lessen the burden on the cryptocurrency sector. The center-left parties that were “most eager to restrain crypto in every way possible” have lost a significant number of seats, according to Ferber. After losing eighteen seats, the Greens/EFA EU now have 53 MEPs.This political group supported the vote in 2022 to prohibit unhosted wallets and even made an attempt to outlaw proof-of-work (PoW) cryptocurrency mining in Europe. According to Peter Moricz, partnerships lead at DLC.Link, a company that offers Bitcoin BTC self-wrapping, the new parliamentary balance has relieved cryptocurrency miners. “With less influence from the Green Party, EU cryptocurrency miners can sleep better at night.” The rise of far-right parties, especially in Germany and France, two major economies, is also noteworthy.
The significant increase in backing for far-right groups has led French President Emmanuel Macron to announce early elections.These parties may not always be in favor of the cryptocurrency sector, according to Michael Gebert, chairman of the European Blockchain Association, who told Cointelegraph that “their conservative stance on financial regulation could lead to stricter measures,” even though these parties frequently advocate economic freedom.According to Gerber, right-wing groups have pushed for more stringent anti-money laundering and Know Your Customer regulations, more stringent transaction reporting requirements, and more compliance costs through licensing and frequent audits. France, led by Marine Le Pen’s National Rally (NR), and Germany, led by Alice Weidel’s Alternative for Germany (AfD), are not recognized for their willingness to embrace cryptocurrency. Both, meanwhile, are reluctant to embrace the impending digital euro.Despite the widespread belief that China and the United States are outpacing Europe in the technology race, the adoption of uniform crypto regulations by EU members has elevated Europe to a promising position as a major player in the global crypto market. According to Henrique Corrêa da Silva, president of the New Economy Institute, a tech think tank, “crypto stands as one of the best opportunities for Europe to avoid losing another train in the global tech race,” as he stated to Cointelegraph.
He went on to say that since the “U.S. and China have lost the plot—for now,” Europe must keep moving in this direction. The executive director of the Latvian Blockchain Association, Reinis Znotiņš, told Cointelegraph that the US legal system and ecosystem growth are “significantly behind,” and that the recent EU Parliament’s stance has shown promise for the cryptocurrency sector. Europe is already leading the world in cryptocurrency regulation thanks to the establishment of the Markets in Crypto-Assets Regulation (MiCA).According to Mark Foster, EU policy director at the Crypto Council for Innovation, Europe enjoys a first-mover advantage because to MiCA, he told Cointelegraph. He thinks that the world’s largest single market may “foster business” provided the unified crypto regulation is properly administered.
According to him, one key distinction between China and the United States is that “in Europe, cryptography is not a party political issue.” Since cryptocurrency is not a contentious right-left topic, “policy continuity” is anticipated following the most recent voting results. According to João Augusto, chief compliance officer of Bit2Me, a Spanish exchange, MiCA II—which will include regulations covering non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), and decentralized finance (DeFi)—is the next crucial milestone. With so much at stake, Foster thinks the EU should carefully consider the “cost/benefit analysis before embarking on further legislation — e.g., on staking, DeFi or NFTs.”