New regulators are set to define Europe’s cryptocurrency policies

The European Parliament is going to appoint a new European Commission, which will shape the European Union’s crypto policy for the next five years. Elections are taking place all around the world, including in the European Union. This autumn, the European Parliament will vote on establishing a new European Commission, which will translate political agendas into legislative proposals. The next commission will not enter office until at least November, thus it is still too early to judge the class of 2024’s impact on bitcoin policy. However, we can find a few trends that indicate how the new MPs are likely to approach regulation.

Europe is moving to the right

The first trend is that Europe’s centre of gravity is shifting to the right, which will affect enterprises of all kinds. Taxation and approaches to innovation will be the subject of debate. France, in particular, will face a difficult ride ahead due to rising volatility and an uncertain political future. Crypto firms should take attention of these issues.

Parliament has drifted to the right, and centre-right parties are less interventionist. However, crypto policy in Europe is not a party subject, so a regulatory stop for crypto seems unlikely. In general, the centre-left Socialists and Greens are more sceptical than their centrist counterparts, the liberal Renew Party and the conservative European People’s Party.

Jockeying for influence

A second trend involves officials competing for influence over innovation policy. Individual actors, rather than political groups, are likely to have a greater influence on crypto policy during the next commission term. Some of the incoming MEPs will most likely strive to distinguish themselves by specialising in this emerging policy area. We may also see important senior policy advisors compete for authority within the commission. It is worth emphasising that council presidency posts are important as countries want to make their imprint on the EU’s digital-asset policies. Denmark, for example, will have the presidency in the second half of 2025, and it has a proactive regulator who has been conducting incisive research.

The persons who succeed Mairead McGuinness and Valdis Dombrovskis as centre-right Commissioners will be critical to the future of cryptocurrency. At the parliamentary committee level, where the real work is done, economic and monetary affairs policymakers will continue to be the most relevant and influential committee for cryptocurrency and digital assets. The leadership here is very stable, with the Socialist group holding the chairmanship and many of the group coordinators remaining in their positions.

Innovation as a pillar of policy

The third trend is a growing recognition that innovation will be a foundation of policy during the next few years. Certain topics, such as digital privacy and artificial intelligence, have been designated as EU policy priority. Expect the commission to be more assertive and forceful in enforcing landmark legislation passed last term, particularly the Digital Market Act and Digital Services Act, which establish comprehensive regimes for digital “gatekeepers,” including provisions for content moderation on digital platforms.

On the commercial side, one item to look out for is an increase in institutional use of cryptocurrency and distributed ledger technology. That would most likely result in political intervention. It is unclear what, if any, EU regulatory impediments exist at this time.

However, before the EU launches new policies, officials and politicians should consider a cautionary lesson. Over the previous five years, the EU has made significant contributions to global crypto policy leadership. As others catch up, the EU would be prudent to verify that the rulebook it has already draughted is adequately implemented and “fit for purpose” before starting on large new legislative workstreams. That’s not to imply that modest changes won’t be implemented. However, the EU should be aware that going too far, too quickly in a globally competitive (and mobile) business is dangerous.

Doing so would contradict the EU’s goals and intentions by driving businesses to other jurisdictions rather than increasing the regulatory bar for everyone. European authorities are seeking to boost competitiveness, and doubling down on an innovation-friendly framework for digital assets will undoubtedly aid in luring the employment and growth that Europe so sorely requires.

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