Crypto regulation in Europe: towards the future with the new European Commission of 2024

The European Parliament will vote in the autumn for a new European Commission, which will have the task of translating political priorities into new legislative projects: among the most watched sectors, the crypto regulation in Europe stands out. 

A topic of great interest and relevance not only for financial markets, but also for the safety and protection of consumers.

The context of the current crypto regulation in Europe

The European Union has proven to be quite proactive in defining a regulatory framework for the cryptocurrency sector. In 2023, the MiCA (Markets in Crypto-Assets) regulation came to light, representing a starting point for the regulation of cryptocurrencies on the continent.

This regulation was created with the intent to harmonize the rules for all member countries, protect consumers, and promote innovation, while keeping a watchful eye on financial stability.

However, with the elections approaching and the formation of a new European Commission expected in November, there are questions about how the new legislators will tackle the challenges and opportunities that the cryptocurrency market will present in the near future.

What to expect?

Although it is still too early to precisely determine the impact of the new European Commission on cryptocurrency policies, we can identify some predictive trends that could influence the crypto regulation in Europe.

1. Greater emphasis on security and transparency: With the growing popularity of cryptocurrencies, concerns related to cybersecurity and transaction transparency are on the rise.

   The new European Commission could focus its efforts on further strengthening anti-money laundering (AML) and Know Your Customer (KYC) regulations, to ensure that industry operators comply with the highest standards of compliance.

2. Balanced approach to innovation: Europe faces a complex challenge. On one hand, it must ensure that the crypto market is safe and regulated; on the other hand, it must avoid stifling innovation.

   The new Commission could therefore work to find a balance between regulation and the promotion of technological development, perhaps encouraging the adoption of blockchain in key sectors, such as banking, healthcare, and education.

3. Regulation of stablecoins and digital currencies: Stablecoins and digital currencies issued by central banks (CBDC) are topics that are gaining more and more attention.
   With the advent of the digital euro, expected by 2025, the 2024 Commission will have to deal with regulating the stablecoin ecosystem to ensure that they do not pose a threat to monetary stability.
4. Sustainability and cryptocurrencies: Another aspect that could be a priority in the new European political agenda is environmental sustainability. The European Union has long been a leader in the fight against climate change, and this could also be reflected in the regulation of cryptocurrencies.
   The mining of cryptocurrencies, in particular, is known for its high energy consumption, and new legislators might propose measures aimed at reducing the environmental impact of these activities.

The challenges of crypto regulation in Europe

Despite the efforts made by Europe, the regulation of the cryptocurrency market still presents several challenges. A critical aspect is represented by the globalization of the crypto sector. 

Cryptocurrencies know no boundaries and operate on a global scale, which makes it difficult for any governmental entity, including the European Union, to effectively monitor and regulate all transactions.

Furthermore, there is a risk that overly strict regulations may push innovators to seek jurisdictions with less severe regulations, thus slowing the growth of the sector in Europe. The challenge for the new European Commission will therefore be to balance the need to control the market without stifling innovation and technological development.

Despite the challenges, crypto regulation in Europe also presents several opportunities. The new European Commission could leverage the potential of cryptocurrencies and blockchain technology to improve administrative processes, promote transparency, and strengthen citizens’ trust in the digital ecosystem.

Furthermore, Europe has the opportunity to become a global leader in the field of regolamentazione crypto. If it manages to establish a solid yet flexible regulatory framework that protects consumers and fosters innovation, it could attract new investments and stimulate economic growth.

Conclusion

The year 2024 will be a decisive year for the European Union, with the election of a new European Commission that will play a crucial role in defining future policies. 

Regarding crypto regulation, the new directives will need to find a balance between security, innovation, and sustainability, while simultaneously addressing the global and local challenges of the sector. 

The direction that the new legislators will take will be crucial for the future of cryptocurrencies in Europe and for the region’s ability to remain competitive in a rapidly evolving market.