Posted 2 years ago | by Ben Armstrong
EU Plans Comprehensive Digital Asset Regulations – Will People Prefer Alternative Assets?
Recently leaked documents point to a wide reaching set of EU regulations for digital assets, including stablecoins which may or may not be based in the value of the European common currency. Europe has taken an open stance on crypto, and has left the vast majority of the policy decisions up to its member states.
As a result of these actions, crypto services have caught on in many EU nations. If the EU wants to continue to host crypto and blockchain businesses, the planned regulations should support existing businesses, and allow them to continue to develop new tools for traders and investors.
According to the leaked documents,
“By 2024, the EU should put in place a comprehensive framework enabling the uptake of distributed ledger technology (DLT) and crypto-assets in the financial sector. It should also address the risks associated with these technologies.”
One issue that the EU may face is the decentralized nature of tokens – as they can't be controlled in the same way that fiat currency can be. On the plus side, it does seem like there will be more regulations in place for stablecoins, which is probably a good thing.
An Open Market is Best in the EU – or Anywhere
If the EU is working to make Security Tokens (STs) easier to create and trade – great. There are some serious questions surrounding stablecoins – which are just another form of ST. In addition to STs that represent fiat currencies, there is also likely huge demand for metals-backed STs.
According to the report,
“By 2024, the principle of passporting and a one-stop shop licensing should apply in all areas which hold strong potential for digital finance.”
While this does sound promising from the standpoint of STs, this move may also be a step towards a cashless society. The report states that as much as 80% of transactions in the EU are still made in cash, which is apparently an issue for regulators.
Digital Cash Won't Help Brussels Secure Control
The power hungry maniacs that are at the top of the EU ladder may see digital currencies as a way to further their control over the economic bloc – and this would be extremely foolish. People are interested in digital currency because it is outside of state control – which is one of the big reasons why crypto is a very different kind of asset.
The problem with promoting a digital Euro, Yuan or US dollar is that by making digital cash popular – cryptos will also benefit. The debt problem that central banks have created isn't going anywhere – in fact, it is likely to be much worse in the near future.
It is very clear that the EU sees itself as a central planning authority, which never has a happy ending. The Eurozone won't last to see the proposed legislation for digital assets take shape if the current centrally-planned ideals continue to be used – as the economic situation in many EU member states is dire.
Alternative Assets are the Future
Regulations are great – if they support a free market that allows people to use a stable currency.
Unfortunately, the policy makers that have power globally see the state as being far more important than the economy, which is somewhat worse than the economic ideals that led the USSR to collapse.
Given the present trajectory – we can expect the world to be a global Venezuela in the coming decades. Once an economy falls into the abyss – and governments dig in – the suffering can be beyond imagination.
Sadly – in this situation – the economic insanity is global – and we are likely facing a lost quarter century – if we are lucky.
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