Europe’s crypto industry can ‘sleep better at night’ with new parliament

The new European Parliament is set to continue the EU's relatively supportive policies towards the cryptocurrency industry.

Last week, 185 million EU voters from 27 member states took part in the elections to elect the new European Parliament.

The European political scene has changed with the overrepresentation of the far right, the merger of the European People's Party (EPP) and the collapse of the Greens/European Free Alliance (Greens/EFA).

The EU is faced with the difficult task of politically satisfying the overall complexity of the continent as sovereign states take different approaches to issues such as EU aid distribution, migration and asylum policy, climate change and energy transition or shaping common defense strategies.

Although this is a complex political field, Europe has managed to meet some of the needs of the crypto and blockchain industry.

Will this new EU Parliament support crypto regulation? The European crypto community spoke with Cointelegraph to analyze the results of the election.

A new parliament is good for the crypto industry.

The largest and most influential group in the EU Parliament, the EPP has 189 seats in the EU Parliament.

German MEP Markus Faber told Cointelegraph that he believes the reduction of 13 seats compared to the last EU election will provide stability to the crypto industry.

Ferber explained that the EPP's technology neutrality is based on its risk-based approach to use and not just the underlying technology.

A major change has been made in the European Union Parliament that could take the pressure off the crypto industry, he said. “Centre-left parties that were eager to block crypto as much as possible lost a lot of seats,” Ferber said.

The Greens/EFA have 53 seats after losing 18 seats.

In the year In 2022, this political faction stood behind the vote to close unhosted wallets and even tried to ban proof-of-work (PoW) crypto mining in Europe.

Peter Moricz, the leader of the partnership between Bitcoin (BTC) self-wrapping solution DLC.Link, told Cointelegraph that the new parliamentary balance has been a relief for crypto miners.

“EU miners can sleep better at night because the Green Party won't gain much power.”

The rise of far-right parties is particularly significant in Germany and France, the two economic powerhouses.

This support for far-right parties is so great that French President Emmanuel Macron has called for snap elections.

Michael Gebert, chairman of the European Blockchain Association, told Cointelegraph that these parties do not necessarily support the crypto industry: “Although right-wing parties often support economic freedom, their conservative stance on financial regulation can lead to stricter measures.”

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Gerber said right-wing parties have called for know-your-customer and anti-money laundering requirements, stricter transaction reporting and increased compliance costs through licensing and regular audits.

France, with National Rally (NR) with Marine Le Pen, and Germany, with Alternative for Germany (AfD) with Alice Weidel, are not known for their openness to cryptocurrencies. However, both are skeptical about accepting the upcoming digital euro.

The EU's first mover position in crypto regulation is at stake.

Despite the common perception that Europe is losing out in the technology competition with the US and China, the adoption of unified crypto regulation across EU countries has made Europe a promising global player in the crypto industry.

Henrique Correa da Silva, president of the New Economy Institute, a technology think tank, told Cointelegraph that he believes “crypto is one of the best opportunities for Europe to avoid losing another train in the global technology race.”

He added that “since America and China have lost the plot – for now” Europe should continue this way.

Rennis Zinotish, CEO of the Latvian Blockchain Association, told Cointelegraph that “US regulation and ecosystem development is significantly behind” and the latest EU Parliament approach is promising for the crypto industry.

The creation of markets in Crypto-Assets Regulation (MCA) has made Europe a pioneer in global crypto regulation.

Mark Foster, EU policy leader at the Crypto Council for Innovation, told Cointelegraph that MCA gives Europe a first-mover advantage. He believes that if managed properly, unified crypto regulation could “boost business” in the world's largest single market.

He believes that the significant difference between America and China is that “crypto is not a matter of party politics in Europe”. […] “Crypto is not a divisive right-left issue” and therefore, he expects “policy continuity” after the final voting results.

João Augusto, Chief Compliance Officer of Spanish exchange Bit2Me, told Cointelegraph that the next important phase is MiCA II, which will include rules for decentralized finance (DeFi), decentralized tokens (NFTs) and decentralized autonomous organizations (DAOs). t currently covered.

Foster believes the EU should conduct a careful “cost/benefit analysis” before introducing further legislation – for example, on staking, DeFi or NFTs – as there is much at stake.

The European crypto industry needs balanced regulations

Regulation is a living entity that must be constantly updated or modified as the crypto industry evolves, and the second version of the MiCA Regulation is already in the works.

Sebastian Hein, chief risk and compliance officer at institutional stakeholder group Northstack, told Cointelegraph that national regulatory authorities (NRAs) should release expectations from MCA's detailed implementation so that companies can prepare earlier and be more targeted.

He believes Europe's new focus should be on using higher regulatory standards to “quickly connect the digital asset space to TradFi.”

Hein highlighted the need for balanced regulation, as the EU's high regulatory standards could represent a double-edged sword for the crypto industry.

On the one hand, it provides investors and partners with “greater security for companies striving for that level of compliance and regulation.” But on the other hand, smaller companies “may see this regulation as a burden.

Edwin Mata, CEO and co-founder of the token-suite Brickken, told Cointelegraph that the European Parliament should create incentives for the issuance of tokenized assets in European states.

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Mata believes the market for real-world wealth (RWA) tokens is huge, with “trillions of euros at stake.” “He believes that Europe will benefit from RWA tokenization as the capital, know-how and infrastructure needed for this growing market can be established within the EU.

A common denominator required by crypto industry actors is the need to invest in education and awareness activities to inform regulators and the public about the potential of blockchain and crypto technologies.

Mata believes EU law could become too restrictive if EU lawmakers “lose a deeper understanding of the technology's potential”.

Europe has been leading the global technology race. Proper crypto regulation could help a fast-growing industry flourish on the old continent.