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New EU Parliament Elected: What’s The Future For Cryptocurrency In Europe?

Last Updated June 15, 2024 11:12 AM
Giuseppe Ciccomascolo
Last Updated June 15, 2024 11:12 AM

Key Takeaways

  • Far-right and conservative parties made significant gains in the European Parliament elections. 
  • The center-right European People’s Party (EPP) maintained its position as the strongest group in the European Parliament.
  • How does the EU Parliament’s view on cryptocurrencies change after the vote?

The results of the recent European Union parliamentary elections may change the EU’s approach to digital assets and cryptocurrencies. While the center-right European People’s Party (EPP) maintained its position as the strongest political force, the surge of far-right and conservative parties has added a new layer of complexity to the regulatory landscape for crypto and blockchain technology.

The new European Parliament’s diverse composition means that the implementation and potential adjustments to key frameworks like the Markets in Crypto Assets (MiCA) regulation will be closely watched. With factions ranging from crypto-skeptic populists to innovation-friendly centrists, the legislative process governing the future of digital finance in the EU is poised for vigorous debate.

Who Won EU Elections

The recent election  proved to be a resounding victory for the far-right across the European Union, while proving disastrous for liberal and green parties. However, the center-right European People’s Party (EPP), led by European Commission President, Ursula von der Leyen, maintained its position as the strongest political group in the European Parliament. The EPP consolidated its position as the largest bloc in the 720-seat chamber, gaining eight seats compared to the 2019 elections, for a total of 182 seats.

The far-right Identity and Democracy (ID) group, led by France’s Marine Le Pen, saw a significant boost, securing 58 seats – an increase of nive from five years prior. Furthermore, the European Conservatives and Reformists (ECR), led by Italy’s Prime Minister, Giorgia Meloni, also made gains, winning four more seats than in the previous election.

Overall, non-aligned parties, encompassing a variety of right and left-wing groups outside the established political blocs, gained ground, winning 99 seats – a 37-seat increase since 2019.

Among the losers, the center-left Progressive Alliance of Socialists and Democrats (S&D) lost four seats but remained the second-largest bloc with 135 seats. However, they fell to second place in major countries like Spain, where they had previously been the leading party in 2019. The liberal Renew Europe (RE) group faced a substantial setback, losing 22 seats. This led to a new election in France, as announced by the President, Emmanuel Macron.

Finally, the Greens, who had achieved significant gains in the 2019 elections, also suffered a major defeat, losing 19 seats.

What Can Change For Crypto World

The stance on cryptocurrencies and blockchain technology among major political groups in the European Parliament is varied, reflecting their broader ideological perspectives.

The European People’s Party (EPP), holding 186 seats, is optimistic about the potential of blockchain and digital currencies. They advocate for robust regulatory frameworks to prevent misuse while fostering innovation. The EPP supports the current MiCA regulation and proposes future adjustments, especially for NFTs. Additionally, the party favors a relaxed tax policy for crypto and explores blockchain applications beyond financial services.

Renew Europe, a centrist group with 79 seats, champions a proactive, innovation-friendly approach to blockchain and digital assets. They support the development of a digital euro to maintain EU competitiveness and advocate for a European digital identity to streamline processes and enhance trust in digital transactions.

The European Conservatives and Reformists Group (ECR), which holds 73 seats, sees blockchain and cryptocurrencies as tools for economic growth but stresses the need for stringent anti-money laundering measures. They are skeptical about the digital euro and favor existing payment solutions instead.

Volt Europa, which won five seats and plans to join Renew Europe, is a pro-European federalist party that advocates integrating cryptocurrencies into the financial system. It supports the introduction of a digital euro and harmonized European investment regulations.

The Most Cautious Parties

The Progressive Alliance of Socialists and Democrats (S&D), with 135 seats, is cautiously optimistic about blockchain and cryptocurrencies. It emphasizes strict regulations to prevent fraud and supports the idea of a digital euro to enhance monetary policy and consumer protection.

The Identity and Democracy (ID) group, with 58 seats, lacks a unified stance on digital currencies. However, member parties like Germany’s AfD oppose the digital euro, viewing it as a threat to individual freedom and privacy. Marine Le Pen of France’s National Rally favors strict regulation over an outright ban on cryptocurrencies.

The Greens/European Free Alliance (Greens/EFA), with 53 seats, takes a cautious stance on blockchain. While they recognize its potential for transparency and sustainability, they are concerned about the environmental impact of energy-intensive cryptocurrencies. They support exploring a digital euro aligned with sustainability goals.

The Left in the European Parliament (GUE/NGL), holding 36 seats, is critical of cryptocurrencies. This is due to concerns over illicit activities and economic inequality. They advocate for a digital euro to enhance public control over the monetary system and support strict regulatory measures.

The European Christian Political Movement (ECPM), with four seats, supports technological progress that respects human dignity and fundamental rights. It is cautious about privacy and anonymity concerns related to digital wallets and eIDs. However, it has not established a detailed policy on cryptocurrencies.

While views on cryptocurrencies and blockchain technology vary among these groups, the general trend is to balance innovation with regulation. The aim is to ensure consumer protection and financial stability.

AI’s Been Regulated, Now It’s Crypto Turn

Given the European Parliament’s diverse composition, debates and potential adjustments to frameworks like the Markets in Crypto Assets (MiCA) regulation are expected after the EU Parliament has regulated artificial intelligence with the EU AI Act. The presence of far-right and conservative parties adds complexity, with some factions being skeptical of the digital euro and prioritizing stringent Anti-Money Laundering measures. Meanwhile, smaller groups like the Greens and the Left emphasize environmental concerns and social justice in digital finance.

The outcomes of the EU elections play a crucial role in shaping the bloc’s legislation. Particularly in implementing the MiCA framework. The strengthening of populist parties could impact regulatory stances. And it may potentially result in stricter controls or more supportive policies.

Several parliamentary committees cover issues relevant to the digital finance sector. Among them are the Committee on Economic and Monetary Affairs (ECON), the Committee on Industry, Research and Energy (ITRE), the Committee on the Internal Market and Consumer Protection (IMCO), the Committee on Civil Liberties, Justice and Home Affairs (LIBE), and the Committee on Legal Affairs (JURI). ECON is the most active in the digital assets and crypto space.

The composition of the European Parliament and its committees is crucial to the future of digital assets and crypto policy. Members of the European Parliament play a significant role in shaping and adopting legislation. The European Parliament’s diverse political landscape will influence the legislative landscape for digital assets and cryptocurrencies. The elections are crucial for determining the pace and direction of the implementation of the MiCA regulation. Varying perspectives from different political groups will definitely shape the future of digital finance in the EU.

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