The upcoming European Union elections this week could significantly impact crypto regulations and the approval of spot Ether exchange-traded funds (ETFs).
The EU parliamentary elections, scheduled from June 6 to June 9, present a pivotal moment for future crypto regulations, according to Jag Kooner, head of derivatives at Bitfinex. Kooner told Cointelegraph:
“The elections could see a major shift in the political landscape, with right-wing and populist parties expected to gain substantial ground.
“This shift could influence regulatory stances, potentially leading to more stringent controls or, conversely, more supportive policies depending on the composition of the new parliament.”
Right-wing parties are anticipated to gain more influence during the 2024 elections.
This trend could lead to increased protective measures for the crypto industry, as noted by Marina Markezic, co-founder and executive director of the European Crypto Initiative (EUCI). Markezic told Cointelegraph:
“The right-wing trend will likely leave its mark on the Commission’s activities, including the expected portfolios of the upcoming Commissioners, which might present more visible protectionist tendencies.”
However, Markezic also highlighted that these right-wing parties could become unexpected allies for innovation-friendly crypto regulations:
“This political shift might lead to the adoption of the generally counter-status quo rhetoric of the crypto industry by representatives from the (far) right, presenting a new and unexpected ally for the crypto advocacy topics in Brussels and Strasbourg.”
The election outcomes could also impact the implementation of the Markets in Crypto-Assets (MiCA) bill, the EU’s first comprehensive regulatory framework for cryptocurrencies, set to take full effect in December 2024.
Despite the potential for more conservative crypto regulations, spot Ether ETFs are gaining traction in Europe.
This follows the U.S. SEC’s approval on May 23 for eight spot Ether ETF issuers, allowing their listing and trading on respective exchanges.
This decision has boosted confidence among European financial institutions regarding Ether ETFs. Kooner from Bitfinex remarked:
“The approval of Ethereum ETFs in the EU is gaining traction… VanEck and Franklin Templeton have already listed their ETH ETFs on the DTCC in anticipation of regulatory approval.
This move sets a strong precedent for the EU, where the regulatory framework provided by the MiCA regulation could facilitate similar approvals.”
Some of Europe’s largest banks are entering the crypto space due to the clarity offered by the MiCA bill.
For instance, Germany’s largest federal bank, Landesbank Baden-Württemberg (LBBW), announced it would provide crypto custody services to institutional clients starting in the second half of the year.
Additionally, Austria’s largest community banking group, Raiffeisen, partnered with Bitpanda at the end of April to offer digital asset services to retail banking customers.
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