Opinion An EU PM asks for Regulatory Acceptance of Cryptocurrencies

An EU PM asks for Regulatory Acceptance of Cryptocurrencies

February 25, 2017

Malta PMIn one of the most prominent public backings when it comes to political echelons, cryptocurrencies were commended by a head of EU state. The prime minister of Malta, Joseph Muscat, who was speaking at a CEPS Ideas Lab that was taking place in Brussels, declared that EU regulators should embrace the concept of cryptocurrencies. In his speech, he particularly named bitcoin as an example of these cryptocurrencies.

He also underlined the need of the EU to go full-on into the FinTech domain and take on the emerging technologies in this rapidly growing field. Muscat also explained that the same trend is slowly catching on in the EU’s financial regulatory bodies but that the process should take on more speed.

The statements are exceedingly important because for the first time ever, they are coming from a fully-fledged head of a state that is located in the European Union. The EU, as one of the most powerful economic entities on the planet, has both the internal market and tech capacity to elevate the FinTech to the next level.

Now, it seems that Malta’s PM is ready to shine a light on the same issue and provide a much-needed high-profile backing to a range of endeavors that are working on the infrastructure needed for reaching the next stage of cryptocurrency development.

The EU Reinvigoration

The second decade of the 21st century was a very turbulent period for the EU and still continues to be a rough patch in many ways. What started as a slow recovery from the global crash of 2008/09 soon became a very European crisis with Greece entering a period of incredible volatility. As the Mediterranean nation recognized its inability to service its debts, the EU entered a period of heated debate whether the block should bail-out Athens or let it slip out of the Eurozone.

In this clash, the German faction, led by Angela Merkel, came out on top and allowed Greece to gain access to EU funds which kept it afloat and out of bankruptcy. But, the clash created a permanent split between the continental power and the UK, as well as other proponents of a loose, low-engagement union. As the refugee crisis exchanges the Greek debt issue, so did that split grow in strength.

Once again, the German block asked for open borders, while many other nations demanded the complete opposite approach. Some of them, like Hungary, simply ignored the suggestions of the EU central bodies and went with their own stop-and-close plans. Finally, in 2016, the shock hit home to the fullest extent when the UK voted to leave the EU and brought about Brexit, one of the most unexpected political events of the 21st century so far.

All of this left the EU in a state of flux with the start of 2017, while markets and most residents showed signs of distress and the same fragility is still evident in the markets. That is why Joseph Muscat believes that the change in thinking is needed.
Malta’s Approach

Malta’s leader has an interesting vision how the ongoing crisis can be resolved. According to him, mechanism of financial investment should be in place for those regions that are Eurosceptic or even anti-EU. In the same domain, the cryptocurrency rise should also find its place. Instead of forcefully resisting the process that includes bitcoin as a means that people use to attain purchases, bet online with BTC and many more things right now, the EU should embrace it.

There should be a mechanism in place that will also regulate these digital currencies, but with the purpose of both protecting consumers and allowing these ventures to expand and grow. With this, in PM’s view, Europe stands a chance to become the home for all those who wish to innovate in this domain.

Here, Malta is leading the way with its primary stock exchange which began by creating an internal committee for blockchain and how it could use this tech. Now, the state also plans to create a domestic blockchain consortium that will provide the basis of what is hope to be a new hub for application development.

New Records for BTC

The forward-thinking statement by Joseph Muscat comes at a great moment because currently, the BTC price is surging like never before. Just a few days ago, BTC surpassed its previous highest price that was set in November 2013 of $1,165 and reached $1,172.

This event came on the top of another record breaking event in which BTC stayed over $1k for the longest duration yet. The markets seem to be appreciating the climb and even though the price dropped after attaining the record, the drop still presents a lot less prominent movement than the rise in price.

On the record-setting day, BTC increased almost 5% in the space of just one single trading day. As always, the reasons for the increase in price are far from clear, but it is getting harder and harder for bitcoin skeptics to remain on the fence about this cryptocurrency.

Small Countries, Big Impacts

It is clear that in the current EU climate, it is the smaller countries like Malta which have both the best vantage point on the issue of cryptocurrency and the best chance of leading by example. While bigger nations would really have to start a big legislative push, their smaller EU neighbors have a much better ecosystem for these experiments.

It looks like Malta understands that the experimenting phase will not last for too long. Just like other digital-only transition, like the one that saw the birth of eSports from regular video games, these processes are both short and fluid. That is why places in the Middle East and the Far East are already positioning themselves in the real-world environment of blockchain services. If the EU skips this step, the loss in potential could be enormous and potentially very troubling for any recovery process that dearly needs any help it can get.

With the backing of entire countries like Malta, the voices in the larger countries of the EU block that are pro-bitcoin and pro-blockchain can gain more traction. Through this, the entire EU stands a lot better shot at getting a real foothold in the blockchain global economy.