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Ahead of the European elections, the cryptocurrency industry pushes the merits of blockchain as political attention shifts to artificial intelligence
The EU has already established the first global rules on cryptocurrencies along with stringent anti-money laundering measures for the sector. But with revisions to the landmark Markets in Crypto Assets (MiCA) regulation likely in the works and the political futures of the legislation’s two main architects up in the air, the European cryptocurrency industry is preparing for change.
The change could mean a number of things, including the industry potentially losing the handful of lawmakers who actually know crypto or a slowdown in decision-making. Even more challenging is being able to outline the industry’s new role in a conversation focused on artificial intelligence (AI) – something the EU has already started to legislate.
Earlier this year, four major EU industry groups joined forces to draw up a blueprint manifest pledging to promote the use of blockchain technology in the bloc to avoid falling behind “in the global race” towards a digital economy.
The groups say so timing for the poster it is “critical considering the upcoming elections and political changes that Europe will undergo” this year and supports the need to continue work on blockchain.
“As we recognize the intrinsic value of technologies such as artificial intelligence, virtual reality and robotics, we believe that blockchain will serve as a layer of trust for the convergence of all these technologies, allowing them to build on each other and form the structure of the future digital economy”, reads the manifesto.
The associations’ hope is that a new and, hopefully, younger Parliament will be easier to approach than the previous one, at least as regards digitalisation.
For policy related to cryptocurrencies and blockchain in particular, political parties may matter less than the age of lawmakers, according to Robert Kopitsch, secretary general of Blockchain for Europe, one of the four industry associations that collaborated on the manifesto.
“If you have a wallet full of cryptocurrencies, you’re much more open to the idea that these are going to be part of the future economy, right? Because you have it, you know how it works, you understand it,” Kopitsch said during an interview with CoinDesk .
Marina Markezic, co-founder of the European Crypto Initiative (EUCI), who also collaborated on the manifesto, says younger politicians are also likely to be more tech-savvy.
“So it would also be easier to explain, talk to them” about blockchain technology, Markezic said.
But first, according to Benedikt Faupel of the German digital industry association Bitkom, things overall could potentially slow down, “just because we don’t know how the elections will go.”
Crypto policy in the European Parliament (EP) didn’t have much support at the start and was led by “mostly three or four people,” Markezic said.
Kopitsch and Markezic agree that Greek politician and former Vice President of the European Parliament Eva Kaili was the driving force behind cryptocurrencies in government. Kaili’s dismissal from Parliament due to a high-profile corruption scandal was seen as a blow to political efforts, but thanks to German legislator Stefan Berger, MiCA managed to reach the end of the line.
Berger, who was the package’s rapporteur and tasked with managing the framework through negotiations, helped champion an effort by green politicians in the European Parliament to limit the use of the energy-intensive proof-of-work consensus mechanism which would effectively ban Bitcoin. in the union.
“He did so much,” Markezic said, referring to Berger’s work on MiCA.
Berger is currently rapporteur for the EU’s legislative proposals for a digital euro, but is also running for re-election this June. According to Jonas Gross, head of the Digital Euro Association, the results of an election of this magnitude are difficult to predict, and it is “impossible to discuss specific officials who may not return this year.”
“We see that the European Parliament is currently, under the leadership of Stefan Berger, following a very innovative and open-minded approach when it comes to cryptocurrencies, stablecoins and the digital euro,” Gross added. “It would be desirable to create a Parliament with a similar innovative approach to advance these digital money issues in a way that benefits the EU.”
Another MiCA architect whose future is up in the air is Mairead McGuinness, who serves as financial stability commissioner. MiCA was proposed by the European Commission under the purview of McGuinness. You have said that you will not participate in the 2024 parliamentary elections, but you are willing to remain for another term as Commissioner, although that decision is ultimately up to the overall EU government.
With MiCA all but out of the way, another key framework for some cryptocurrency observers is the EU’s push for a central bank digital currency, which is fueling controversy – and even conspiracy theories – with some politicians raising concerns that a digital euro it could give EU governments too much power and access to private information.
According to Anne-Sophie Gógl, a member of the executive board of the Digital Euro Association, some right-wing political parties are using plans for a digital euro to “create a climate against the European Union”.
“They are using words like control and surveillance. They also accuse the digital euro of excluding marginalized groups,” Gógl said in a written statement. “We fear that this trend will also have an impact in Europe after the elections: a greater share of right-wing populist representatives in the European Parliament and therefore the risk that the topic of the digital euro will be misused for disinformation.”
However, if these parties manage to win a large chunk of new seats, this could “massively slow down the decision-making process” for a digital euro, Gógl said.
EU technology policy priorities have shifted away from cryptocurrencies to focus on artificial intelligence, and the cryptocurrency industry is pushing for the application of blockchain technology alongside artificial intelligence, according to Anja Blaj, policy expert at EUCI.
This will not be the first time industry bodies have pushed for the acceptance of blockchain technology over the adoption of speculative assets. During the latest bear market, which saw the fall of several cryptocurrency giants, the industry quickly pivoted to promoting blockchain applications in traditional finance and other areas at events like World Economic Forum.
“What people are actually moving away from is the financial connotation of the blockchain industry. So, very often, we actually push for the narrative of focusing on the ReFi of regenerative finance… on supply chains or how, for example, data can be managed,” Blaj said during an interview with CoinDesk.
Regenerative Finance (ReFi) sees cryptocurrency projects investing in sustainability in an attempt to solve some of the problems created by the markets.
Configuring blockchain as something vital to the digitalisation of Europe could prove crucial to the survival of the sector in the region.
When the current government was formed, “there was a lot of hype around blockchain” and Europe was the first to move on policies and initiatives, Markezic said.
“Now we talk more about artificial intelligence and… why would you use your political power to talk about something that may no longer be so present?” Markezic spoke about the risk of waning political interest in blockchain.
The elections will take place from 6 to 9 June.