Economy

How Europe Can Win The Blockchain Battle

After being left behind in the Internet revolution, places like France, Malta and Switzerland are making a concerted effort to stay ahead of the crypto-asset curve.

Bitcoin is on the rise on the continent
Bitcoin is on the rise on the continent
Raphaël Bloch

-OpEd-

PARIS — Could Europe be a future blockchain paradise? Unthinkable just a few months ago, the idea is quickly gaining ground, especially in European capitals, from Paris to Valletta, where the lessons of the Internet left their mark. Just look around. More than 20 years after its creation, the Web is dominated by American and Chinese groups, much to Europe's chagrin, which has promised itself not to let that happen again with the blockchain.

Brussels keeps repeating that Europe must be on the offensive on this front. And they're right, because even if the world's two leading economies again have a head start — with giants such as Binance, the "Alibaba of cryptocurrencies," or ConsenSys, the world's "studio" for blockchain — Europe has the means to catch up with them. More importantly, it can really establish itself.

That's because European countries have paid close attention to the Bitcoin boom and understand it. Most have already begun adapting their laws. Malta, Estonia and Lithuania — and Switzerland too — are obviously at the forefront, with increasingly clearer tax laws and regulations, but they are not the only ones.

Larger players, such as France, are also making huge progress, and Paris wants to become a driving force in Europe. The government is working on new economic legislation with which it seeks to "send a clear message that France and Europe are a destination of choice," says lawmaker Pierre Person, who has been involved in a parliamentary mission on cryptoassets.

The Old Continent also understands that blockchain is a technology that requires a lot of flexibility. In their approach, European countries are trying to reconcile the need for regulation with the flexibility the blockchain needs to grow and evolve. "That's the whole point: to succeed in putting a legal framework around technology without preventing it from developing," says Pierre Person.

Above all, Europe — with its 500 million inhabitants — is a vast market like China and the United States. It has the means to carry a lot of weight, with several technological hubs, researchers and important financial centers. It also has a favorable economic model that is industrial, financial and liberal at the same time. This isn't necessarily the case in China and the U.S., where the former's interventionism and the latter's economic financialization are very strong and not exactly compatible with a massive adoption of the blockchain.

The first negative signals, in fact, have already been seen in China, where the Communist regime has begun taking control of things after 12 months of laissez-faire. It must be said that the philosophy carried by the blockchain is contrary to the Asian giant's economic approach. The blockchain decentralizes, while the Chinese economy centralizes: everything goes through Beijing.


Europe's economic weight carries over to the digital world — Photo: Crypto360

The Chinese authorities have recently closed down several cryptocurrency trading sites and confirmed the ban on initial coin offerings (ICOs) to finance Blockchain projects. Europe is doing the opposite by trying to attract investors. Even the EU's financial regulator is considering the most appropriate legislation for ICOs. Beijing has also decided to take a closer look at investments made by Chinese giant companies in the sector.

Across the Atlantic there's a different problem. Companies have carte blanche to develop, but the ecosystem's growth and maturity seem limited, at least in its global dimension. The ecosystem is already highly financialized and close to Wall Street, with several giants already on the case, such as Fidelity, BlackRock or Goldman Sachs. This situation could deter potential future new players, as the development costs of a blockchain project continue to increase.

The blockchain economy is developing, but the market is still very immature.

"This is the American particularity," a U.S. fund manager explains. A large number of projects have taken on a merely financial dimension, notably under the impetus of the Securities and Exchange Commission (SEC), which regulates the sector at a snail's pace by applying to it the current legislation on financial securities. A position that European regulators reject, preferring a more open approach, mostly so they can continue to let the sector innovate and develop.

The United States also has to work with the power of its technology giants, who dominate not just the American but also the global economy. This is the whole paradox with Google, Apple, Facebook, Amazon and Microsoft. These giants, which represent nearly $4 trillion in capitalization, are looking at the blockchain. Microsoft has started to invest in the sector. Facebook has made the blockchain one of its research areas to find out how to "make the best use" of cryptocurrencies.

But these companies have little interest in developing the blockchain on a large scale because their model is based on centralization and massive data collection. "The blockchain economy is developing, but the market is still very immature. Everything still remains to be done," explains Joseph Lubin, boss of ConsenSys. And that's the head of one of the most powerful companies in the sector speaking.

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Society

What It Means When The Jews Of Germany No Longer Feel Safe

A neo-Nazi has been buried in the former grave of a Jewish musicologist Max Friedlaender – not an oversight, but a deliberate provocation. This is just one more example of antisemitism on the rise in Germany, and society's inability to respond.

At a protest against antisemitism in Berlin

Eva Marie Kogel

-Essay-

BERLIN — If you want to check the state of your society, there's a simple test: as the U.S. High Commissioner for Germany, John Jay McCloy, said in 1949, the touchstone for a democracy is the well-being of Jews. This litmus test is still relevant today. And it seems Germany would not pass.


Incidents are piling up. Most recently, groups of neo-Nazis from across the country traveled to a church near Berlin for the funeral of a well-known far-right figure. He was buried in the former grave of Jewish musicologist Max Friedlaender, a gravesite chosen deliberately by the right-wing extremists.

The incident at the cemetery

They intentionally chose a Jewish grave as an act of provocation, trying to gain maximum publicity for this act of desecration. And the cemetery authorities at the graveyard in Stahnsdorf fell for it. The church issued an immediate apology, calling it a "terrible mistake" and saying they "must immediately see whether and what we can undo."

There are so many incidents that get little to no media attention.

It's unfathomable that this burial was allowed to take place at all, but now the cemetery authorities need to make a decision quickly about how to put things right. Otherwise, the grave may well become a pilgrimage site for Holocaust deniers and antisemites.

The incident has garnered attention in the international press and it will live long in the memory. Like the case of singer-songwriter Gil Ofarim, who recently claimed he was subjected to antisemitic abuse at a hotel in Leipzig. Details of the crime are still being investigated. But there are so many other incidents that get little to no media attention.

Photo of the grave of Jewish musicologist Max Friedlaender

The grave of Jewish musicologist Max Friedlaender

Jens Kalaene/dpa/ZUMA

Crimes against Jews are rising

Across all parts of society, antisemitism is on the rise. Until a few years ago, Jewish life was seen as an accepted part of German society. Since the attack on the synagogue in Halle in 2019, the picture has changed: it was a bitter reminder that right-wing terror against Jewish people has a long, unbroken history in Germany.

Stories have abounded about the coronavirus crisis being a Jewish conspiracy; meanwhile, Muslim antisemitism is becoming louder and more forceful. The anti-Israel boycott movement BDS rears its head in every debate on antisemitism, just as left-wing or post-colonial thinking are part of every discussion.

Jewish life needs to be allowed to step out of the shadows.

Since 2015, the number of antisemitic crimes recorded has risen by about a third, to 2,350. But victims only report around 20% of cases. Some choose not to because they've had bad experiences with the police, others because they're afraid of the perpetrators, and still others because they just want to put it behind them. Victims clearly hold out little hope of useful reaction from the state – so crimes go unreported.

And the reality of Jewish life in Germany is a dark one. Sociologists say that Jewish children are living out their "identity under siege." What impact does it have on them when they can only go to nursery under police protection? Or when they hear Holocaust jokes at school?

Germany needs to take its antisemitism seriously

This shows that the country of commemorative services and "stumbling blocks" placed in sidewalks as a memorial to victims of the Nazis has lost its moral compass. To make it point true north again, antisemitism needs to be documented from the perspective of those affected, making it visible to the non-Jewish population. And Jewish life needs to be allowed to step out of the shadows.

That is the first thing. The second is that we need to talk about specifically German forms of antisemitism. For example, the fact that in no other EU country are Jewish people so often confronted about the Israeli government's policies (according to a survey, 41% of German Jews have experienced this, while the EU average is 28%). Projecting the old antisemitism onto the state of Israel offers people a more comfortable target for their arguments.

Our society needs to have more conversations about antisemitism. The test of German democracy, as McCloy called it, starts with taking these concerns seriously and talking about them. We need to have these conversations because it affects all of us. It's about saving our democracy. Before it's too late.

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