Blockchain, MiCA and the Vision of Future Digital Economy Policy

The Blockchain for Europe Summit 2024, held in Brussels, offered a platform for deep discussions on blockchain's evolving regulatory and technological landscape. 

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Kristina Lucrezia Cornèr, Head of Global Strategy and Partnerships at Exponential Science moderated the fireside chat on ‘How does MiCA compare in the international regulatory context’ with Tom Duff Gordon, Coinbase’s Vice President for International Policy. Their dialogue shed light on pivotal topics, including the Markets in Crypto-Assets Regulation (MiCA) and the synergy between blockchain and artificial intelligence (AI).

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Juan Ignacio Ibañez, Chief of Staff at Exponential Science also participated in the summit by contributing to the panel ‘A New EU Agenda for a Truly Digital Economy,’ moderated by Robert Kopitsch, Secretary General of Blockchain for Europe, and joined by Joachim Schwerin, Principal Economist at the European Commission, and Ondrej Kovarik, Member of the European Parliament. They discussed the challenges and opportunities for Europe in achieving digital competitiveness, highlighting the need for a unified proactive vision and balanced regulation to foster innovation.

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MiCA: A Template for Global Regulation?

As the implementation of MiCA, set to take effect on the 30th of December 2024, approaches, it has become a focal point for regulatory discussions worldwide. MiCA is a comprehensive European Union framework intended to regulate crypto-assets, ensure transparency, and foster innovation while mitigating risks. Gordon commended the European Commission for its foresight, noting that MiCA was conceptualised years before blockchain achieved its current prominence. “It is the most comprehensive framework we see globally,” he remarked, highlighting its potential to inspire regulatory models across other regions, including the United States.

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However, the discussion also underscored that MiCA is not without its challenges. For example, innovations such as staking were in their infancy when MiCA was drafted and, therefore, are not explicitly addressed. Gordon pointed out that, while MiCA provides much-needed clarity, it must evolve to accommodate advancements in decentralised finance (DeFi) and other emerging trends.

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The pan-European regulatory framework offers a significant opportunity for Europe to lead in blockchain innovation. Gordon urged stakeholders to leverage MiCA’s clarity not just for compliance but to foster innovation and competitiveness. 

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“Europe is good at regulating, but we’ve got to get better at innovating,” he said, suggesting that blockchain should be embraced as a horizontal enabling technology beyond financial services. These sentiments were echoed in the panel on Europe’s digital economy, where Robert Kopitsch stressed, 

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‘It’s rather leading for regulation, rather than leading through innovation.’

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Ibañez added to this by underlining the disparity between infrastructure deployment and adoption in Europe, pointing out the advancements in payment systems in emerging economies like India and Brazil, which Europe has yet to match.

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While Europe is a regulatory leader with frameworks like MiCA and DORA, Ibañez noted the lack of momentum and a unified narrative driving digitisation efforts. This call for proactive vision aligns with MiCA’s potential to serve not only as a regulatory foundation but also as a catalyst for innovation.

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‘We need a narrative and a sense of direction. It’s not a bad starting point, but I’d like to see a narrative of a pro-digitisation direction of Europe.’

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Blockchain and AI: Scaling Trust in the Age of Automation

Another topic highlighted during the discussion was the convergence of blockchain and AI—two transformative technologies poised to reshape industries. Gordon emphasised that while AI scales content, blockchain scales trust. 

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Read also: Blockchain, AI and Sustainability: How Emerging Technologies Converge

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He illustrated this with examples of how blockchain can enhance data provenance and authentication, critical for ensuring the integrity of AI-generated outputs. Gordon explained,

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‘Immutable ledgers can store photographs, articles, and other data, ensuring they haven’t been tampered with.’ 

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This capability becomes increasingly important as AI systems take on autonomous decision-making roles, such as booking services or executing payments.

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A Path to Financial Inclusion

The discussions at the event also touched upon blockchain’s potential to drive financial inclusion. Gordon highlighted the use of blockchain for cost-effective remittances and fractional ownership of assets, enabling access to traditionally exclusive financial markets.

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He pointed to real-world use cases, such as an athlete funding her Olympic journey through tokenised training data, as examples of how blockchain can empower individuals. These stories, Gordon argued in a conversation with Cornèr, are crucial for building trust in the technology and demonstrating its utility beyond speculative trading.

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Ibañez also highlighted Europe’s potential as a leader in crypto innovation, noting that European banks are among the most crypto-friendly globally, thanks to frameworks like the Payment Services Directive, which could foster financial inclusion. 

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‘Europe actually has more crypto-friendly banks than any other region, and that’s not in spite of regulation but because of it.’

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While Europe has made significant progress, Ibañez emphasised the need for continued efforts to drive adoption and create a cohesive vision for digital competitiveness.

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Looking into 2025

Several key takeaways from the Blockchain for Europe Summit 2024 were apparent as the industry is seemingly entering a new phase of maturity, with tighter integration between innovation and regulation. 

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MiCA serves as a foundational framework, but it must remain adaptable to technological advancements and regional nuances. Meanwhile, the intersection of blockchain and AI promises new opportunities but success in both cases will depend on collaboration between policymakers, innovators, and communities.

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The MiCA Crypto Alliance, launched by the DLT Science Foundation, is a member-driven initiative aimed at simplifying and improving compliance with the Markets in Crypto-Assets (MiCA) regulation.

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Visit the MiCA Crypto Alliance website to learn more about reducing compliance costs, and exclusive tools for sustainability assessments.