‘The crypto industry can sleep better at night’ with a new parliament in Europe

The European elections resulted in a new EU Parliament that will rule for the next five years. The new European Parliament is expected to maintain the European Union’s relatively favorable regulations towards the bitcoin industry.

Last week, 185 million EU voters from 27 member states took part in the elections for the next European Parliament. The European political arena has changed as a  of increased far-right representation, the consolidation of the European People’s Party (EPP), and the demise of the Greens/European Free Alliance.

The EU faces the difficult task of politically satisfying the continent’s overall complexity as sovereign countries take differing approaches to sensitive issues such as EU grant distribution, migration, and asylum policy, climate change and energy transition, and developing a common defence strategy.

Despite this difficult political landscape, Europe has been able to address some of the needs of the crypto and blockchain industries. Will the next EU Parliament favour cryptocurrency regulation? The European crypto community has contacted Cointelegraph to discuss the aftermath of the elections.

The new parliament is good for the crypto industry

The EPP, the largest and most prominent group in the European Parliament, holds 189 seats in the EU Parliament.

Markus Ferber, a German MEP from the EPP, told Cointelegraph that the increase of 13 seats from the previous EU elections gives stability to the crypto industry since the “EPP often has a more pragmatic and technology-neutral approach to regulation.” Ferber explained that the EPP’s neutrality on technology stems from its risk-based strategy, which considers use cases rather than just the underlying technology.

He stated that there has been a dramatic shift in the EU Parliament that could relieve pressure on the cryptocurrency industry. Ferber remarked that the center-left parties that were “most eager to restrain crypto in every way possible” had lost a significant number of seats.

The Greens/EFA EU have 53 seats after losing 18. across 2022, this political faction supported a resolution to prevent unhosted wallets and even attempted to prohibit proof-of-work (PoW) crypto mining across Europe.

According to Peter Moricz, partnerships head of Bitcoin $66,444 self-wrapping solution DLC. Link, the new parliamentary balance has provided relief for crypto miners. “Without the Green party gaining much power, EU crypto miners can sleep better at night.”

Michael Gebert, chairman of the European Blockchain Association, said these parties do not always favor the crypto industry: “While right-wing parties often support economic freedom, their conservative stance on financial regulation could lead to stricter measures.”According to Gerber, right-wing parties have pushed for stronger Know Your Customer and Anti-Money Laundering laws, stricter transaction reporting, and greater compliance expenses through licensing and regular audits. France, with Marine Le Pen’s National Rally (NR), and Germany, with Alice Weidel’s Alternative for Germany (AfD), are not known for their crypto-friendly policies. However, both are apprehensive about using the impending digital euro.

EU’s first-mover position in crypto regulation is at stake

Although there is a widespread belief that Europe is losing technological ground to the United States and China, the adoption of uniform crypto regulation across EU countries has made Europe a viable global participant in the crypto business.

Henrique Corrêa da Silva, president of the tech think tank New Economy Institute, told Cointelegraph that “crypto stands as one of the best opportunities for Europe to avoid losing another train in the global technology race.”

He stated that Europe must continue down this path because the “U.S. and China have lost the plot — for now.”Reinis Znotiņš, executive director of the Latvian Blockchain Association, to Cointelegraph that “U.S. 

The Markets in Crypto-Assets Regulation (MiCA) initiative has established Europe as a global leader in crypto regulation. Mark Foster, EU policy head at the Crypto Council for Innovation, told Cointelegraph that MiCA has given Europe a competitive advantage. He believes that unified cryptocurrency legislation may “foster business” throughout the world’s largest single market if properly regulated.

He feels that one key distinction between the United States and China is that “crypto is not a party political issue in Europe crypto is not a divisive right-left issue” and hence expects “policy continuity” following the latest voting results.

Europe’s crypto industry needs balanced regulations

Regulation is a living creature that must be regularly updated or altered as the crypto sector evolves, and the second iteration of the MiCA regulation is already in development.

Sebastian Heine, chief risk and compliance officer at institutional staking partner Northstake, told Cointelegraph that National Regulatory Authorities (NRAs) should provide missing expectations for MiCA’s “detailed implementation so companies can prepare earlier and be more targeted.”

He believes that Europe’s new priority should be on utilising its high regulatory standards to “connect the digital asset space quicker with TradFi.” Heine emphasised the importance of balanced regulation, since the EU’s stringent regulatory standards may be a double-edged sword for the crypto industry.

On the one hand, it offers investors and partners “high levels of security for companies that strive for that level of compliance and regulation.” However, smaller enterprises “may find this regulation a burden.” Edwin Mata, CEO and co-founder of token-suite Brickken, told Cointelegraph that he believes the European Parliament should provide incentives for the issuance of tokenized assets in European territories.

Mata believes that the potential market for real-world asset (RWA) tokenization is massive, with “trillions of euros at stake.” He argues that RWA tokenization might help Europe since “the capital, expertise, and infrastructure needed for this rising market could be established within the EU.”

One common requirement across crypto sector actors is to invest in education and awareness campaigns to educate regulators and the general public about the potential of blockchain and crypto technologies.

Mata argues that EU regulation may become excessively restrictive if EU politicians “lack a deep understanding of the technology’s potential.”Europe has been behind in its efforts to lead the global technological race. Proper cryptocurrency regulation might help a rapidly evolving business thrive on the old continent.

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