The use of cryptocurrencies is relatively low in the EU region. However, the increasing adoption has raised discussions on regulations.
Most Europeans prefer their respective governments handling crypto regulations instead of the European Union. These findings are based on a Euronews survey. The survey also concludes that an increasing number of people support the creation of national digital currencies to boost financial independence from the European Union. Additionally, a majority of the respondents support the creation of national regulations by individual countries. Only a minority, precisely a quarter of the respondents, approve giving the EU powers to make financial regulations decisions for the member countries.
About the Survey
The survey was conducted by Redfield & Wilton Strategies exclusively on behalf of Euronews. It is the most extensive study on cryptocurrencies and financial regulation across Europe. The survey took place between the 4th of and 10th of august and interviewed 31 000 respondents spanning across 12 member states. The interview was taken in the following countries: Lithuania, Germany, Portugal, Estonia, Poland, France, Hungary, Spain, Greece, Italy, Netherlands, Latvia.
The study comes in the wake of the EU implementation of a cryptocurrency regulatory framework focusing on the financial health of the eurozone. Recently, the EU approved an unprecedented €806.9 billion Covid recovery fund. The European Central Bank (ECB) is also closely monitoring trends in the banking sector, including the significant shift towards cashless digital options.
The EU member states have varying views on how much influence the ECB should have on their economies. Below is a breakdown.
EU and Its Central Bank intervention
|Country||Intervenes too much||Intervene The right amount||Intervenes too little||Don’t know|
According to the study, a huge proportion of the Greece population (61%) believes EU and ECB intervention in their country was too much. Germany and Latvia follow, with more than 30% of the population holding a similar view.
According to Dimitar Lilkov, a research officer at the Brussels-based Wilfred Martens Centre for European Studies, some countries, including Italy and Greece, still feel the impact of the Euro Crisis a decade ago. The countries believed the crisis was caused by the EU’s bad decisions instead of the nation’s bad handling of the banking sector, labor market, and soaring public debts.
However, in some countries, most of the respondents opined that the EU intervention was perfect. Lithuania leads in countries with most respondents arguing that ECB intervention was in the right amount, followed by Spain. Portugal and Estonia tie in third place.
Most respondents opine that the national government should take responsibility for the financial regulations. To be precise, the number of respondents in support ranges between half and two-thirds. Specifically, the number was lowest in Hungary and highest at 76% in the Netherlands.
Who Should Determine Government Regulations?
|Country||Country’s government||The European union||Don’t Know|
There were mixed reactions on whether the national governments should create digital currencies to boost monetary independence from the European Union. However, more people leaned in favor of the initiative. Italy, Greece, and Estonia lead the pack at 41%, 40%, and 39%, respectively. The Netherlands was the only country with more people opposing the idea, at 37%. In Germany, there was an equal number of people supporting the move and opposing at 30%. In general, more than a quarter of the responders were opposed to the initiative.
Creation of National Digital Coins
There is an increasing call for adopting decentralized digital currencies. China, the US, and Britain are all at different levels of investigating the possibility of launching digital forms of fiat currencies. Outside the EU, Sweden is already piloting this digital euro (e-euro).
An introduction of the e-euro in countries that use the euro would collapse their plans of establishing digital currencies. They would be bound to use the e-euro under the coordination of the eurozone banking systems. Otherwise, they would have to secede from the eurozone. Non-euro countries have more freedom to explore the potential of national digital currencies.
The table below shows the extent of supporting or opposing the creation of the national cryptocurrencies to assert monetary independence from the EU.
|Country||Strongly Support||Support||Neither Support nor Oppose||Oppose||Strongly Oppose||Don’t Know|
According to the poll, many people have heard little about cryptocurrencies which explains their lack of investment in virtual currencies. The minority holding digital currencies investments are driven by personal interest and high returns. What’s more, just like financial regulations, the majority prefer their government regulating cryptocurrency. It is worth noting that Bitcoin is the most popular cryptocurrency, according to the survey.
The use of cryptocurrencies is relatively low in the EU region. However, the increasing adoption has raised discussions on regulations, the institutions, and the methodologies of these discussions. Going forward, regulators will have to tightly control digital assets through centralization or establish a legal and regulatory framework to govern cryptos.
Michael is a cryptocurrency trader and blockchain enthusiast and the founder of CryptoPredictions.com, a website that provides daily, weekly and yearly cryptocurrency price forecasts. Michael is also a regulator contributor at popular finance magazines that include BitcoinMagazine, FX Empire, Equities, DailyForex and TalkMarkets. If he doesn't trade or investigate practical use cases of cryptos, he goes for a run or swim.