Some hope that a long-awaited new EU law will help the bloc attract innovative digital companies, but it may struggle to compete with a new crypto-friendly US administration.
The much advertised new EU cryptocurrency laws They will come into force in just a few weeks, but lawmakers in Brussels are already wondering if they will lose out to the new Donald Trump Administration.
The new EU crypto framework is designed to keep markets under controlapplying financial style rules to protect traders who might otherwise fall victim to scammers or market manipulation.
Some argue that this additional credibility could contribute to the EU’s leadership in the innovation sector, but The US federal government is about to become even more crypto-friendly starting in January.
President-elect Trump has promised that his government will have a strategic reserve of bitcoin, and news of his victory in early November triggered cryptocurrency price at all-time highs. This comes just as the sector prepares for the arrival of the EU regulation on cryptoasset markets, Mica, which will come into full force on December 30.
“In a couple of weeks, the cryptoasset ecosystem will take shape part of the EU regulatory and supervisory framework,” Marcel Haag, deputy director general of the European Commission’s Directorate-General for Financial Services, told a largely crypto-industry audience in Brussels on Thursday.
“The EU has been a world leader in providing a clear and predictable regulatory framework to enable innovationwhile protecting consumers and financial stability,” Haag said, adding: “Looking ahead, the EU must work to maintain that leadership.”
La Mica demands that providers such as crypto exchanges register with the authorities and comply with minimum standards to segregate assets and avoid the use of privileged information. Other provisions on stablecoins, cryptocurrencies tied to the value of assets such as gold or the US dollar, came into effect in June.
Transatlantic competition
Advocates argue that EU law can help the fledgling sector, but some lawmakers are now nervous about possible competition across the Atlantic. “The cryptocurrency sector was attracted to Europe by the stability and predictability of the rules,” said Ondrej Kovarik (Czechia/Patriots for Europe): “Traditional banks with a banking license have everything they need in Mica to issue stablecoins“.
“If conditions change on the American side… then I think the US can become attractive again,” he said. He cites the need for cut non-digital friendly financial lawsand Mica’s excessive reserve and redemption stablecoin rules – and expects the topic to be part of the first talks with a new Trump Administration. Other lawmakers are optimistic that Mica can help Europe catch up after decades of missed opportunities.
Mica “provided a space for these new technologies to develop, so if we missed web one and web two… we might be on board web three,” he said, referring to successive waves of digital innovation: the birth of the internetthe emergence of technology giants such as Google and Facebook, and blockchain technology.
He fears that a more favorable US policy could cement dominance of the dollar trading marketsupplanting European currencies, and adding to the arguments in favor of the bloc having a digital euro.
“With Trump’s victory, stablecoins will get bigger, so the importance for the ECB (European Central Bank) is to have sovereignty” he said. “We need to have an extra tool in the ECB’s bag.”
Lose the north
For others, focusing on cryptocurrencies like bitcoin is missing the point. “When we talk about what Trump has in mind, we talk about cryptocurrencies,” Mathieu Michel told ‘Euronews’, but the Belgian minister is in favor of analyzing other uses of the technology.
“My way of identifying blockchain is more the way it can support public applications, regulated applications in the way it brings transparency and security,” said Michel, secretary of state for digitalization in the federal government, adding: “Blockchain for governments is more important than cryptoassets“.
Are you interested in a new public infrastructure called ‘Europeum’ – a play on words with the name of the well-known Ethereum blockchain – which, according to him, could underpin online services such as identity management, making it easier for citizens, for example, to change their driving license online.
ADVERTISINGFor some, These centralized plans are a far cry from cryptocurrencies’ promise of freedom of action.a technology that is supposed to allow interactions without intermediaries, such as banks or governments. “It may seem a little contradictory,” Michel said, but he hopes hecombination of innovative technology with safety regulations can “reconcile two worlds”.
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