Perhaps not very surprisingly the EU is about to decide that people can’t go around trading stuff on that scale without some pen pushers somewhere keeping a close eye on them. This week France proposed that the emerging industry be centrally regulated by the EU, with power handed to the Paris-based European Securities and Markets Authority instead of national regulators. That is almost certain to happen. Officials in Brussels, funnily enough, invariably agree to any proposal that makes the EU more powerful. Cryptos will very soon be regulated from Paris.
Whether that is really necessary is open to debate. There are always lots of scare stories about how cryptocurrencies are used by gangsters and terrorists without a lot of evidence to back them up. In fact, most criminals, for obvious reasons, still prefer cash, and if the EU really wanted to clamp down on money laundering it wouldn’t have happily permitted the €500 (£428) note to circulate from 2002 to 2019 (its only purpose seemed to be to make drug dealers’ suitcases a little less heavy to carry around – no one ever used a €500 note to pay a cab fare).
Sure, there are some firms that will need to be controlled, such as the recent clampdown on the crypto exchange Binance by the Financial Conduct Authority. Cryptos are still the Wild West of the money markets, and plenty of spivs and chancers are piling into the market. And yet that does not have to mean the whole industry needs to be micromanaged centrally. When the EU decides to “regulate” something it almost always means to crush it. We have seen that with countless new technologies from search engines to sharing, to finance, which largely explains why Europe’s technology industry remains a backwater compared to the US or China.