The EU Signals Conditional Openness to Crypto
But only if risks are managed appropriately and regulations are strengthened first.
The European Union could be open to some forms of cryptocurrency, but that openness would be conditional.
The EU Commissioner for Home Affairs Ylva Johansson recently spoke at the Munich Security Conference, per Bloomberg. During a panel, she said she isn't "uncomfortable" with digital currencies, but wants to see them regulated "in a proper way." She suggested that the EU could be prepared to open up to cryptocurrency if risks are managed appropriately and regulations are strengthened first.
She also acknowledged she is a "party pooper" compared to others and stressed that her concern lies with criminal organizations and terrorists' potential ability to utilize the currencies' signature anonymity.
Crypto gaining ground in the EU and elsewhere.
Last fall, a Chainalysis report of global trends found that an increasing amount of residents in countries throughout the world are interested in cryptocurrency and a growing number of countries is adopting these digital currencies. Per the analysis, global adoption of cryptocurrency grew 2,300 percent from the third quarter of 2019 to the second quarter of 2021, and 881 percent in the year leading up to Q2 2021. Chainalysis attributed this to residents' interest in preserving savings in the face of currency devaluation, as well as the ability to send and receive payments digitally. Institutional investment, the analysis found, drove the adoption boom in North America, Western Europe and Eastern Asia.
Also at the Munich Security Conference were FTX cryptocurrency exchange CEO Sam Bankman-Fried and Cryptology Asset Group co-founder Christian Angermayer. Bankman-Fried agreed that cryptocurrency embrace comes with a risk that criminals could use the anonymous currencies, but noted that many platforms have enhanced their oversight in response.
This signal that the EU could be embracing cryptocurrency soon is notable, especially when contrasted with other countries' stances. China, for instance, banned cryptocurrency trading and mining last summer, shaking up the financial world. An embrace by the EU could mean the start of a new era in personal and business financing in the region as countries around the world grapple with the best way to utilize this new technology.