Euronews reported that as the European Union seeks to regulate crypto trading, this move could rekindle regulatory concerns. According to the news outlet, Bitcoin continued its upward trend after former U.S. President Donald Trump gave an enthusiastic speech on cryptocurrencies.
During the Bitcoin 2024 conference, Donald Trump, who is currently running for re-election as a Republican candidate, made some very optimistic promises to the crypto community. He said he would make America “the crypto capital of the world and the bitcoin superpower of the universe.”
“Unfortunately, we see these attacks on crypto,” Donald Trump told the Nashville crowd. “It’s just part of a much bigger pattern by left-wing fascists to weaponize government against any threat to their power they’ve done it against me.”
“If I’m elected, Joe Biden’s anti-crypto crusade ends with his presidency and Kamala Harris,” he added. “The second I take office will be when the persecution stops and when the weaponization ends against this industry.”
Donald Trump Crypto Vision
He also promised widespread deregulation and suggested establishing a “strategic national Bitcoin stockpile.” To loud applause, Donald Trump emphasized: “I’m laying out my plan to ensure that the United States will be the crypto capital of the planet and the Bitcoin superpower of the world.” He pledged that “America will again become a country which protects property rights, privacy rights and freedom of transaction association speech.”
If elected, Donald Trump also vowed to remove Securities Exchange Commission (SEC) Chairman Gary Gensler from office. He said: “I will put in place an SEC chairman who will build your future not block it.” Most recently, Donald Trump became the first presidential candidate ever to accept cryptocurrency donations raising $4 million (€3.69 million) in crypto for his campaign.
While these comments may excite crypto enthusiasts around digital tokens generally recognized as good stores of value; they might also create difficulties for European lawmakers looking at how best regulate them. This is because their use could threaten the dollar’s position as the world’s second reserve currency after the euro.
This year has seen a recovery in crypto markets driven by central bank money printing and the bitcoin halving, among other factors including SEC’s approval of spot Bitcoin ETFs. Since Biden dropped out of contention earlier this month, bitcoin has rallied on hopes that Donald Trump would win next November. It rose 13% in October to above $68,700 (63,244 euros) just 6% shy of its March 2024 peak.
Should he become president again and deliver on these promises at Bitcoin 2024, it could trigger another wave of euphoria around digital currencies. This could force European politicians to rethink their regulatory approach.
Cryptocurrencies have gained significant popularity over the past decade as digital assets that are not directly linked with any particular national government or traditional banking system but can be traded electronically for goods and services like conventional money. The rapid growth in cryptocurrencies has necessitated regulatory frameworks to ensure stability within markets where such instruments are traded while also protecting investors from fraud or other forms of financial crime associated with their use.
In September last year, the European Commission adopted a comprehensive Digital Finance Package aimed at embracing digital finance whilst managing risks adequately. Amongst these were Markets in Crypto Assets Regulation (MiCA) which was enacted partially starting June 2023 with full implementation expected by December same year
The decentralized nature of cryptocurrencies makes them very conducive to money laundering and the financing of terrorism. Cryptocurrencies have been used to fund military activities between Ukraine and Russia since the latter invaded the former. International sanctions have forced Russian entities to use cryptocurrencies for establishing privately owned armies, perpetrating ransomware attacks and trying to beat sanctions, according to Chainalysis’ Head of Sanctions.
European Union regulators are concerned that stablecoins linked to the U.S. dollar could pose a threat against the euro. For price stability, most stablecoins are pegged on USD. Commodity trading denominated in dollars explains why cryptocurrency traders keep their wealth in this form.
Exchanges should keep equivalent USDs as reserves for backing all stablecoins. As more people need these stable currencies, they buy USDs which strengthens it while weakening Eurozone’s single currency further; thus if Bitcoin gains more prominence within US financial system there may be increased issuance of such coins thereby putting additional pressure on other units including euro.
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