The party “Bündnis 90 / Grüne” votes on its election program. The party congress voted for an amendment on cryptocurrencies – and against another amendment. Fortunately. However, one of the party’s European politicians is calling for a draft law from the EU Commission to be tightened up. In doing so, he also strongly contradicts the resolutions of the party conference.
In advance, to avoid misunderstandings: We actually stay away from politics and especially parties. But since there are elections this year, it might be of essential interest to many readers here how the different parties stand on cryptocurrencies – especially if it is a party like the Green Party, which has numerous voters among our readers.
Two amendments for the election program
So far, the Green Party has published its program for the 2021 federal election as a draft. Then, at the recent party conference, there were many amendments to the draft that were voted on by the grassroots. One of our readers, who says he is a “simple member with no function or ambitions” of the party, drafted one such amendment and submitted it with 20 supporters. The Federal Executive Committee then adopted a slightly shortened version.
It concerns the section on the introduction of a digital euro on page 45, in which the party calls for the European Central Bank (ECB) to create a digital euro that complements cash while ensuring data and legal certainty for consumers and businesses. By contrast, it “strictly rejects an erosion of the monetary and currency monopoly by private currencies.”
This sentence caused confusion and uncertainty among Bitcoiners. Is he just targeting advances like Facebook’s Libra? Or does he announce a ban on Bitcoin and other cryptocurrencies, which can indeed be understood as “private currencies”? Unfortunately, this passage remains unclear.
The election program, however, is clearer about the fight against money laundering. Clear rules are needed in digital payment to combat “crimes such as money laundering, the depiction of sexualized violence against children, tax evasion and terror financing. To this paragraph, the party congress now adds a sentence:
“We want to do justice to the rapid developments in the field of decentralized financial applications and explore the opportunities and risks of cryptocurrencies and blockchains in a differentiated manner.”
This sentence, our reader writes, is “really not a miracle thing,” but, at least, an “argument against the ban motion” that keeps various options open in any coalition negotiations. At least, the sentence could be understood as contradicting the possible call for a ban.
More important, however, might be which amendment did not make it into the election program. That’s because a group of party members called for the inclusion of the following sentence:
“Cryptocurrencies like Bitcoins have a huge and growing climate-damaging energy demand that causes global damage. Therefore, we advocate to abolish such climate-damaging cryptocurrencies first across Europe and then globally.”
However, this motion was rejected by a majority of more than 80 percent at the party conference and quite different winds are blowing in Brussels and Strasbourg. But all this does not stop Sven Giegold, European politician of the Green Party, from exactly pleading at the European level to ban cryptocurrencies with energy-consuming consensus mechanisms.
We already know Mr. Giegold from a report on a draft law on cryptocurrencies, which he introduced with colleagues just under a year ago. At that time, we had to note a “symptomatic cluelessness”.
Unfortunately, Sven Giegold is an influential EU politician on the cause of digital currencies. The bureaucratic process he hooks into is the following: The EU Commission proposed legislation on crypto-assets last fall. On May 31 of this year, the political groups in the European Parliament tabled amendments. Sven Giegold is now acting as lead MEP on this for the Greens / EFA group.
Where they want to sharpen up
On his blog, Giegold explains to what extent he would like to tighten up EU legislation. He welcomes the fact that stablecoin projects like Facebook’s Diem are to be regulated by strict requirements. However, he dislikes that the draft law “revolves too much around these future markets and pays too little attention to the currently existing crypto markets with their many problems.” Giegold misses measures against “the criminal use of cryptocurrencies, their sometimes considerable ecological footprint and the regular lack of responsible parties.”
As a result, he has drafted some proposals to make the bill a bit stricter:
- “crypto-assets and related services” should not be supervised solely by national regulators, as the Commission’s draft law provides, but also by the European supervisory authorities ESMA and EBA. Among other things, this is intended to prevent “lax supervisory practices from becoming an instrument of location policy.”
- Of particular concern to Giegold is that cryptocurrencies are “a key tool for cybercriminals.” This problem, he said, is so acute that it should not be put off for the next version of the Money Laundering Act. Instead, he said, there is a need for
- “requirements specifically tailored to crypto-assets.” Therefore, Giegold proposed the following amendments:
Exchanges and other “crypto service providers” must implement the usual anti-money laundering and customer identification measures that are already widely established. “Special due diligence requirements” should apply, however, - “if funds originate from so-called ‘unhosted wallets,’ i.e., addresses managed by customers themselves.”
Service providers are not allowed to offer services on privacy coins. Above all, they must not sell them or allow them to be traded. - ESMA is to maintain a list of international service providers that are implementing the measures inadequately. “Transactions to, and other dealings with, such providers is prohibited for crypto service providers.”
- Giegold also has an amendment on the Greens’ core issue: ecology. Because “many of the existing cryptocurrencies have a significant ecological footprint.” Mining wastes huge amounts of electricity, Bitcoin consumes as much as the Netherlands or half of the world’s data centers, he said. Therefore, the EU should “successively require minimum energy standards for crypto assets.” The Commission should identify “unsustainable forms of mining” that “crypto service providers* must then keep their hands off after a transition period.”
- It undermines “the central principle of our social market economy” if cryptocurrencies or DeFi services are operated in a decentralized manner. Because then there would be no one who was responsible and could be held accountable. Here,
- Giegold sees a “blind spot” in the Commission’s draft legislation, as “virtually all rules start with the issuer of a crypto asset.” Giegold therefore suggests that for issuerless assets, exchanges and other service providers must take on the obligation: they must publish white papers and be liable for disclosures made therein.
Contradictions between Germany and the EU
To sum all this up: Bitcoin is used more and more nowadays, for BTC loans [1] or trading [2] for example. That leads to a lot of energy consumption. The Green party base votes against a ban on Bitcoin and other cryptocurrencies because of the high power consumption – but Sven Giegold wants to introduce it on a European level. The party base votes to explore the opportunities of cryptocurrencies in a differentiated way – and Sven Giegold wants to suppress monetary autonomy through proprietary wallets with strict measures, ban coins that offer real privacy all around, and make it virtually impossible for exchanges to carry DeFi tokens [3] without getting involved in incalculable liability risks.
In short, Giegold wants to crack down on almost everything that makes cryptocurrencies interesting. The party is apparently divided on how to deal with the issue, which probably explains the vague wording in the election program. However, we are curious to see whether the Greens will resolve this gaping contradiction between national election program and European policy.
[1] www.bitcoinloansites.com
[2] www.nextmarkets.com
[3] www.defirate.com/tokens/