The European Commission’s Web4 strategy might be a flop

Published

2 years ago

July 18, 2023

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On July 11, the European Commission formally adopted its new strategy on Web4 and virtual worlds with the aim of ensuring “an open, secure, trustworthy, fair and inclusive digital environment” for European Union citizens. The strategy is based on four main pillars, revolving around the empowerment of human resources, support of businesses, further development of public services, and shaping of global standards for “Web 4.0” — a freshly coined term that attempts to preempt the next technological wave.

While it’s commendable that the European Commission is proactively strategizing for the EU to take the lead on Web 4.0, or Web4, and virtual worlds, we shouldn’t neglect the fact that for all the fanfare of Web3 and the trends that accompanied it, notable credit and financial institutions have so far only firmly and mainly placed their confidence in Bitcoin (BTC) and, to a lesser extent, Ethereum.

Indeed, it is difficult to assert that Web3 left anything of considerable substance behind it — aside from a sharp but short-lived spike in the Lamborghini and Rolex markets. The sooner that term is forgotten, the sooner we’ll be able to focus again on the areas that do matter.

The EU’s general stance on Bitcoin has arguably detracted from its image as a forward-looking, technology-advancing region, and it would do well to either retract or modify previously taken positions on matters such as proof-of-work mining. The reinvention of money is far from a light matter, and if the EU is to take a pincer hold of what ultimately makes the world move, it is well-advised to do so by both advancing its digital euro project and also supporting the other side of the coin, thereby hedging its position to a degree where it is minimizing risks and maximizing possible opportunities.

In order to do so, it must proverbially unstick the European Central Bank’s head from the sands, limit any anti-Bitcoin publications from the famed Fabio Panetta, and adopt a neutral monetary stance that aligns with a technology-neutral one.

European Union has introduced its Web4 and virtual worlds strategy

The strategy is in line with the 2030 objectives of the Digital Decade policy program and three of its key pillars of digitalization: skills, business, and public services.

The outlook of the EU economy beyond… pic.twitter.com/lg1X5Yvccj

— FanBe_web3 (@FanBe_web3) July 12, 2023

Moving on to the cornerstone of the proposed strategy on Web4 — digital twinning — it is evident that the EU faces stiff competition from stalwarts such as the United States and China in digitally dominant areas such as artificial intelligence. While one may argue that, on the physical side of things, the EU enjoys a notable position in areas such as manufacturing and global exportation of goods, there is still an appreciable degree of catching up to do in relation to digital areas such as crypto and cloud computing.

In order for the EU to take the lead on the intersection between the physical and digital realms, it must ramp up its efforts to emancipate digitally exclusive domains such as crypto, which presents notable opportunities given the current lull in the market. While most are forgoing innovations such as decentralized finance (DeFi) and decentralized autonomous organizations as passing trends that have recently exited the limelight, it is clear that these are still very early days for such topics, and that optimally positioning oneself while the general attention is elsewhere will very likely pay handsome dividends in a few years’ time.

When it comes to DeFi, specifically, Europe as a continent has quietly asserted itself as a leader, with countries such as Italy and France being the birthplace of some of the most notable projects in the space. It would not do to ignore the advantageous position gained in the market in this respect, and with the total value locked metric still hovering comfortably above the $45 billion mark, it is amply clear that DeFi staunchly took the bear market punch and is nowhere near knocked out. It’s also likely to come back for more in the next market reversal.

With innovations such as ERC-4626 ready to unlock a wealth of exciting new prospects in the space, it is safe to state that we have yet to see DeFi’s true strengths and potential, and if the EU manages to take the helm and steer innovation going forward, it will cement its place in the inevitable financial revolution that has been bubbling in its pot for the past few years.

Over the past decade, cryptocurrency has been reinvented and reshaped to no avail. The promise of a new form of money still remains its strongest premise, and digital assets flourish best in a digital environment. The lessons learned from the repeated security token flops should still be fresh enough to accentuate the fact that we are not yet ready for a seamless intersection between what is digital and what is physical, and that in order for two subjects to simultaneously succeed, there must be a comparable, if not identical, level of excellence.

That is something that is still sorely missing in the EU when it comes to digital and crypto assets, which is why it should remain the focus in the short term.

Jonathan Galea is the CEO and founder of BCAS, a European crypto regulatory consultancy firm. He has consulted numerous regulatory entities across multiple jurisdictions on crypto-related matters, including the structuring of novel legal frameworks. He holds in an LL.D. in law from the University of Malta.

Matteo Vena is the chief strategy officer at BCAS, a crypto-focused regulatory consultancy firm based in Europe. His area of focus is business and marketing strategy in the Bitcoin and digital assets industry. He worked previously as the managing director for Cointelegraph Italy and as the head of content for Blockchain Week Rome.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Politics

Fed’s Powell reasserts support for stablecoin legislation

Published

3 hours ago

April 16, 2025

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<div>Fed's Powell reasserts support for stablecoin legislation</div>

As digital assets gain mainstream adoption, establishing a legal framework for stablecoins is a “good idea,” said US Federal Reserve Chair Jerome Powell.

In an April 16 panel at the Economic Club of Chicago, Powell commented on the evolution of the cryptocurrency industry, which has delivered a consumer use case that “could have wide appeal” following a difficult “wave of failures and frauds,” he said.

Fed's Powell reasserts support for stablecoin legislation

Powell delivers remarks at the Economic Club of Chicago. Source: Bloomberg Television

During crypto’s difficult years, which culminated in 2022 and 2023 with several high-profile business failures, the Fed “worked with Congress to try to get a […] legal framework for stablecoins, which would have been a nice place to start,” said Powell. “We were not successful.”

“I think that the climate is changing and you’re moving into more mainstreaming of that whole sector, so Congress is again looking […] at a legal framework for stablecoins,” he said.

“Depending on what’s in it, that’s a good idea. We need that. There isn’t one now,” said Powell.

This isn’t the first time Powell acknowledged the need for stablecoin legislation. In June 2023, the Fed boss told the House Financial Services Committee that stablecoins were “a form of money” that requires “robust” federal oversight.

Support for stablecoin legislation is growing

The election of US President Donald Trump has ushered in a new era of pro-crypto appointments and policy shifts that could make America a digital asset superpower.

Washington’s formal embrace of cryptocurrency began earlier this year when Trump established the President’s Council of Advisers on Digital Assets, with Bo Hines as the executive director.

Hines told a digital asset summit in New York last month that a comprehensive stablecoin bill was a top priority for the current administration. After the Senate Banking Committee passed the GENIUS Act, a final stablecoin bill could arrive at the president’s desk “in the next two months,” said Hines.

Bo Hines (right) speaks of “imminent” stablecoin legislation at the Digital Asset Summit on March 18. Source: Cointelegraph

Stablecoins pegged to the US dollar are by far the most popular tokens used for remittances and cryptocurrency trading.

The combined value of all stablecoins is currently $227 billion, according to RWA.xyz. The dollar-pegged USDC (USDC) and USDt (USDT) account for more than 88% of the total market.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Politics

Court grants 60-day pause of SEC, Ripple appeals case

Published

5 hours ago

April 16, 2025

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Court grants 60-day pause of SEC, Ripple appeals case

An appellate court has granted a joint request from Ripple Labs and the Securities and Exchange Commission (SEC) to pause an appeal in a 2020 SEC case against Ripple amid settlement negotiations.

In an April 16 filing in the US Court of Appeals for the Second Circuit, the court approved a joint SEC-Ripple motion to hold the appeal in abeyance — temporarily pausing the case — for 60 days. As part of the order, the SEC is expected to file a status report by June 15.

Law, Ripple, SEC, Court — *April 16 order approving a motion to hold an appeal in abeyance. Source: PACER*

The SEC’s case against Ripple and its executives, filed in December 2020, was expected to begin winding down after Ripple CEO Brad Garlinghouse announced on March 19 that the commission would be dropping its appeal against the blockchain firm. A federal court found Ripple liable for $125 million in an August ruling, resulting in both the SEC and blockchain firm filing an appeal and cross-appeal, respectively.

However, once US President Donald Trump took office and leadership of the SEC moved from former chair Gary Gensler to acting chair Mark Uyeda, the commission began dropping multiple enforcement cases against crypto firms in a seeming political shift. Ripple pledged $5 million in XRP to Trump’s inauguration fund, and Garlinghouse and chief legal officer Stuart Alderoty attended events supporting the US president.

Despite support for the end of the case coming from both Ripple and the SEC, the August 2024 judgment and appellate cases leave some legal entanglements. Alderoty said in March that Ripple would drop its cross-appeal with the SEC and receive a roughly $75 million refund from the lower court judgment. It’s unclear what else may result from negotiations over a settlement in appellate court.

New leadership at SEC incoming

Acting chair Uyeda is expected to step down following the US Senate confirming Paul Atkins as SEC chair on April 9.

During his confirmation hearings, lawmakers questioned Atkins about his ties to crypto, which could create conflicts of interest in his role regulating the industry. In financial disclosures, Atkins stated he had millions of dollars in assets through stakes in crypto firms, including Securitize, Pontoro and Patomak.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

Politics

Italy finance minister warns US stablecoins pose bigger threat than tariffs

Published

13 hours ago

April 16, 2025

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Italy finance minister warns US stablecoins pose bigger threat than tariffs

Italy’s minister of economy and finance warned that US stablecoin policies are more concerning than President Donald Trump’s tariffs, citing the potential for these crypto assets to undermine the euro’s dominance in cross-border payments.

Speaking at an event in Milan, Giancarlo Giorgetti said that while trade tariffs dominate headlines, new US policies on dollar-backed stablecoins present an “even more dangerous” threat to European financial stability, according to a Reuters report.

US stablecoins allow users to invest in a widely accepted method for cross-border payments without opening a US bank account, Giorgetti said. He warned that the growing appeal of US stablecoins to Europeans should not be underestimated.

Giorgetti urged European Union lawmakers to take more steps to boost the euro’s position as an international currency. He added that the digital euro under development by the European Central Bank (ECB) will be essential to minimize the need for Europeans to resort to foreign solutions.

US lawmakers advance stablecoin bills

Presently, stablecoin regulation in the US remains fragmented. Instead of a unified framework, multiple agencies apply existing laws to regulate stablecoins. However, lawmakers are working to implement changes, with several pieces of stablecoin legislation progressing.

On April 2, the US House Financial Services Committee passed the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act. The bill is now headed to the House floor for a full vote.

The bill was introduced on Feb. 6 by Committee Chair French Hill and the Digital Assets Subcommittee Chair Bryan Steil. It would ensure that stablecoin issuers provide information on their businesses, including how their tokens are backed.

In addition, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act establishes rules that require issuers to maintain reserves backed one-to-one, comply with Anti-Money Laundering (AML) laws, protect consumers and boost dollar dominance in the global economy.

The GENIUS Act still requires approval by both chambers of Congress and a presidential signature before becoming law.

ECB exec renews digital euro push

Apart from Giorgetti, ECB Executive Board member Piero Cipollone also urged European lawmakers to intensify their efforts to combat dollar-backed stablecoin dominance in Europe. On April 8, Cipollone wrote an article expressing concerns about the growing popularity of US stablecoins.

The official suggested launching a central bank digital currency to combat this threat to the euro. He said this would aid in preserving the monetary sovereignty of the eurozone.