The recent vote in the European Union to, in effect, ban Proof-of-Work (PoW) cryptocurrencies – via the Markets in Cryptoassets framework – from being traded and used within the trading bloc can be viewed two different ways. On the one hand the fact that such a vote ever in made it to serious contention shows just how outdated and incomplete the analysis of crypto by policymakers remains. Conversely, the reality that this proposal was voted down demonstrates that the outlook for crypto has improved singificantly versus previous years.
As the cryptoasset space continues to evolve and create new iterations of products and services, it is important to take a broader look at both the outlook for bitcoin, and the regulatory assessment process that will influence this outlook. With non-fungible tokens (NFTs) and central bank digital currencies (CBDCs) occupying ever increasing amounts of mindshare, it is tempting to shift the regulatory conversation to standardization, reporting, and auditability. That said, and fully acknowledging how important these factors are for the continued growth of cryptoassets, bitcoin and the recent actions in both the United States the European Union raised several issues to the proverbial front-burner.
Let’s take a look at a few issues that the recent scrutiny that cryptoassets have been under have brought to the surface.