The European Parliament is preparing for a significant transition, with new lawmakers set to determine the European Union’s cryptocurrency policies for the next five years. This autumn, the Parliament will vote on the formation of a new European Commission, which will be responsible for translating political priorities into legislation, including those that impact digital assets and decentralized finance (DeFi).
Shifting Political Landscape and Impact on Crypto
Europe’s political landscape is shifting to the right, which will influence a variety of sectors, including cryptocurrency. Center-right parties, generally less interventionist than their left-leaning counterparts, now hold more sway in Parliament. However, crypto regulation is not strictly partisan in Europe. While center-left groups such as the Socialists and Greens tend to be more cautious about crypto, centrist and conservative parties like the Renew Party and the European People’s Party (EPP) are more open to innovation. Even though far-right parties have gained some traction, their influence on crypto policy is expected to be minimal due to the dominance of centrist parties.
Despite the political shift, it is unlikely that there will be a regulatory pause in the cryptocurrency space. Lawmakers will likely continue shaping policy with a focus on creating a balanced framework that encourages innovation while ensuring regulatory oversight.
Key Players and Influence in Crypto Policy
One of the most important factors in shaping Europe’s crypto policy will be the individuals appointed to key positions. Incoming Members of the European Parliament (MEPs) may see digital assets as an opportunity to carve out a niche and establish themselves as thought leaders. Additionally, senior advisors within the new Commission will play crucial roles in determining the direction of crypto policy.
The presidency of the European Council, held by different EU member states in rotating terms, will also influence the agenda. Denmark, for example, will hold the presidency in late 2025, and it is known for having proactive and forward-thinking regulators.
Replacing Commissioners Mairead McGuinness and Valdis Dombrovskis, who currently lead financial oversight, will be pivotal. These roles have significant sway over economic and financial policies, including crypto. The parliamentary Economic and Monetary Affairs Committee (ECON) will remain central to shaping digital asset regulations, with stable leadership expected to continue guiding discussions.
Innovation as a Key Pillar of Policy
Innovation is set to be a major focus of the next European Commission. As the EU continues to prioritize areas like digital privacy and artificial intelligence, crypto and blockchain technologies will likely be included in the broader framework of tech policy. The Digital Markets Act and the Digital Services Act, already passed, will be enforced more assertively, potentially impacting digital platforms and crypto businesses.
There’s also growing interest in institutional adoption of blockchain and cryptocurrency. If this trend continues, it may prompt additional regulatory scrutiny, especially if traditional financial institutions start offering crypto-related products to retail investors. Policymakers will need to monitor this space to ensure appropriate protections are in place.
Balancing Regulation and Competitiveness
Europe has made strides in becoming a leader in global cryptocurrency regulation, but it now faces the challenge of ensuring its framework remains relevant and competitive. As other regions develop their own regulations, the EU must carefully balance its desire for strong oversight with the need to attract crypto-related jobs and businesses. Over-regulation risks driving innovative firms to other jurisdictions, undermining Europe’s goals of improving competitiveness and fostering growth in the digital economy.
Before embarking on any new legislative initiatives, the EU would do well to focus on implementing its existing crypto regulations effectively. While minor adjustments may be necessary, the Commission should avoid making drastic changes that could stifle innovation in this globally competitive market.
