There is one major player in the world whose moves have quite a significant impact on the crypto market. But there is not much attention given to them due to the recent explosion of news from everywhere else. European Union. This is a body of 27 European nations (Britain left after Brexit) which has evolved as the major node of the global governance debates.
The cryptocurrencies received attraction in France and Germany in the beginning. Both called for a global regulatory framework in the March G-20 summit. The Russians spoiled that move but the Franco-German attitude is the crux of any EU policy. Nobody believed that the cryptocurrencies are so big a threat to the global financial system in March.
They postponed any response to the phenomenon till next summit. Now the tables have turned. No country is in a position to ignore the cryptocurrencies disruptive potential. EU surely is going to take the lead role in any future regulatory move at these summits.
European Union and Blockchain
European Union headquarter is in Brussels. It is effectively a bureaucratic organization. The Eurosceptic movement all across Europe criticize it on its centralization attempts. The custom Union has effectively taken the economic sovereignty out of nation’s hand and European Court of Justice is superseding nation’s court system.
This is the context in which the European Union is operating. Like the Chinese although not at their scale, EU prefers centralization. Thus their attitude toward crypto assets has been ambivalent at the very best and negative from the start. However, Blockchain is something that everybody loves inside EU.
French, German, Dutch, Italian and even British prefer Blockchain and look with suspicion on crypto revolution. They all are of tediously regulatory mindset when it comes to solving any problem. We have alluded to this in an earlier analysis. The political system of EU prefers regulatory mechanism to solve any problem.
Crypto Lovers to Crypto haters
The recent hostility against cryptocurrencies especially Bitcoin is telling. Before the crypto boom of 2017, British leaders at the very least leaders were not so against the cryptocurrencies. There are certain instances which tell why this is the case. In 2015, then British PM David Cameron took London based digital assets corporation Blockchain with UK trade delegation to South East Asia.
His second in command and Tory Exchequer Chancellor George Osborne announced 10 million pound funding to research the opportunities into cryptocurrencies. Mr. Osborne once was spotted using a Bitcoin ATM.
Thatcherite Spirit and British inclinations
The British response is always distinct to any problem than their European counterparts. The Thatcherite spirit of the British is responsible for such action. Thatcherism is a variant of Libertarianism which stresses on the innovation of individuals as drivers of economic boom.
Margaret Thatcher and Ronald Reagan released this potential by deregulation in the 1980s. Tories despite being dragged down by the Liberal Democrats during the time were still guided at least in part on those principles. Niall Ferguson, a public intellectual identified with conservative leanings told Bank of England that Bitcoin may be the future.
British Labor would not have been so lenient toward crypto assets gave the Corbynites takeover of the party. UK has a history of breaking with continental Europe over a myriad of issues and going with the United States.
Macron and Crypto Assets
One European leader who was very crypto friendly was Emmanuel Macron. He even proposed legislation to use Blockchain technology to turn bonds on the French bond market into some kind of crypto asset. But his support changed quickly after the crypto boom and he stresses more on regulation and negative sides of the equation. His stance indicates that his stint as a Rothschild banker might have influenced his earlier stance. The political equations might have a role in his later stance.
Macron stunned the crypto enthusiasts in Europe during his speech to World Economic Forum. He said, “I’m in favor of the IMF [International Monetary Fund] having the mandate to police the entire global financial system, of which whole areas escape regulation. Such as Bitcoin, cryptocurrencies or shadow-banking”.
The fact that the European stance on cryptocurrencies is distinct when one goes to Eastern Europe. The embrace of new technology by Eastern European nations have put them as an ICO heaven of a sort. Even southern flank of the continent might be more inclined towards crypto given the recent Italian confrontation with EU and Maltese intent to be crypto capital of the world. But the dominance of Franco-German axis of the European institutions continues to divide and dictate the crypto policies of the continent.