Pro-Crypto Gains, Green Losses in 2024 EU Elections

From June 6 to 9, over 185 million citizens from the European Union’s 27 member states cast their votes to elect representatives for the new European Parliament. This assembly, which serves as the legislative branch of the EU, has a significant role in outlining the political trajectory for the next five years, including policies related to cryptocurrency and blockchain. The results showed a mixed outcome: the Christian Democrats secured ten additional seats, the Social Democrats lost four, and the pro-business Renew Europe Group saw a significant reduction of 23 seats. The Greens lost 18 seats, and far-right parties experienced notable gains.

With these changes in the political landscape, the leading parties have outlined their plans for the future of crypto and blockchain technologies. The European People’s Party (EPP), also known as the Christian Democrats, emerged as the largest and most influential group with 186 seats, gaining ten more than the previous term. They take a cautious yet optimistic view of cryptocurrencies and blockchain, acknowledging their potential to enhance financial services and economic efficiency. They stress the importance of strong regulatory frameworks to avoid misuse and ensure consumer protection and financial stability.

Stefan Berger, an EPP member who contributed to the EU’s key crypto regulation known as Markets in Crypto-Assets (MiCA), emphasized that crypto assets are becoming increasingly important and have a place alongside traditional financial systems. The EPP supports the existing MiCA law and foresees the need for future regulations, especially concerning NFTs. Berger noted that MiCA builds trust in the industry and offers a competitive edge to the European Economic Area. The EPP also advocates for more relaxed tax policies to foster innovation and the broader adoption of crypto assets, and they are keen on exploring blockchain technology for efficiency gains in public administration.

The Progressive Alliance of Socialists and Democrats (S&D), holding 135 seats after losing four, takes a cautiously optimistic stance on blockchain and cryptocurrencies. They recognize these technologies’ potential to promote financial inclusion and improve public services but are deeply concerned about regulatory and social implications, including fraud prevention, money laundering, and tax evasion. They see the digital euro as a valuable tool for monetary policy effectiveness and consumer protection.

Renew Europe, with 79 seats (losing 23), is known for its centrist, pro-business, and innovation-friendly stance. This group has championed robust regulations for digital finance and cryptocurrencies to prepare the EU for significant digital transformations. They advocate for a proactive, innovation-centric approach, supporting the development of a digital euro to maintain the EU’s digital age competitiveness. Renew Europe also promotes a European digital identity system to enhance trust, streamline administrative processes, and facilitate access to services.

The European Conservatives and Reformists (ECR), who gained four seats to hold 73, take a pragmatic view of cryptocurrencies. They believe that blockchain and digital assets can drive economic growth and modernization. Despite supporting the MiCA regulation, they advocate robust anti-money laundering measures and stringent cybersecurity protocols. The ECR is skeptical about a digital euro, viewing it as unnecessary given existing solutions like instant payments that provide similar benefits without the risks.

Identity and Democracy (ID), with 58 seats after gaining nine, comprises populist and nationalist parties with varied views on digital currencies. While they don’t have an official stance, member parties like Germany’s Alternative for Germany (AfD) are critical of the euro and oppose a digital euro, fearing it threatens cash—a vital element for protecting individual freedoms and privacy.

The Greens/European Free Alliance (Greens/EFA) lost 18 seats, now holding 53. While the group hasn’t developed a comprehensive policy on cryptocurrencies, they generally support the MiCA regulation as a starting point for EU-wide regulatory frameworks. The Greens/EFA are cautious about cryptocurrencies, valuing their potential for transparency and sustainability but concerned about the environmental impacts of energy-intensive mechanisms like proof-of-work.

The Left in the European Parliament (GUE/NGL), with 36 seats after losing one, holds a critical view of cryptocurrencies. They express concerns about their potential to facilitate illicit activities, contribute to economic inequality, and pose risks to financial stability. They support strict regulations, including the possibility of banning energy-intensive crypto mining, to curb environmental impact and speculative risks while promoting economic justice through a digital euro.

In contrast, Non-Inscrits, including parties like Volt Europe, are generally progressive regarding cryptocurrencies. Volt advocates for user digital rights protection, the introduction of a digital euro, and harmonized EU regulations to reduce red tape. They see potential applications of blockchain in digital identities, e-health, and certificate distribution, advocating increased funding for research and development in these areas.

As the new European Parliament takes its place, its diverse composition suggests that debates and potential adjustments to frameworks like MiCA are inevitable. The differing perspectives of each political group—ranging from innovation-friendly policies to stringent regulatory measures and environmental concerns—will ultimately shape the EU’s path in crypto and blockchain technology.