Cryptocurrency NewsWeb 4.0 and the EU's Emphasis on Crypto. Opportunities and Challenges Ahead

Web 4.0 and the EU’s Emphasis on Crypto. Opportunities and Challenges Ahead

There is a significant amount of work remaining for the development of Web 3.0. However, the European Commission’s attempt to push forward with what it refers to as “Web 4.0” seems premature. On July 11, the European Commission formally adopted a new strategy on Web4 and virtual worlds with the goal of creating an open, secure, trustworthy, fair, and inclusive digital environment for European Union citizens. This strategy is based on four main pillars: empowering human resources, supporting businesses, further developing public services, and shaping global standards for “Web 4.0,” a newly coined term that aims to anticipate the next technological wave.

While it is commendable that the European Commission is proactively strategizing to lead the way in Web 4.0 and virtual worlds, it is important not to overlook the fact that, despite the buzz around Web3 and its accompanying trends, significant credit and financial institutions have mainly placed their confidence in Bitcoin (BTC) and, to a lesser extent, Ethereum. The impact of Web3 can hardly be considered substantial, except for a brief and temporary surge in the luxury car and watch markets. The sooner we forget this term, the sooner we can refocus on the areas that truly matter.

The European Union’s general stance on Bitcoin has arguably diminished its image as a forward-thinking, technology-advancing region. It would be wise for the EU to retract or modify its previous positions on matters such as proof-of-work mining. Redefining money is a weighty matter, and if the EU aims to grasp what drives the world forward, it should advance its digital euro project while also supporting other aspects of the cryptocurrency landscape. This way, the EU can mitigate risks and maximize potential opportunities.

To achieve this, the European Central Bank must adopt a neutral monetary stance aligned with a technology-neutral approach and discontinue anti-Bitcoin publications. Moving on to the cornerstone of the proposed Web4 strategy—digital twinning—it is clear that the EU faces tough competition from established players like the United States and China, particularly in digitally dominant areas like artificial intelligence. While the EU has a notable position in physical domains such as manufacturing and global goods export, it still has ground to cover in digital areas like cryptocurrencies and cloud computing.

For the EU to lead at the intersection of the physical and digital realms, it must intensify efforts to embrace digitally exclusive domains such as crypto, which present significant opportunities during the current market lull. While many dismiss innovations like decentralized finance (DeFi) and decentralized autonomous organizations as passing trends that have lost the spotlight, it is evident that it is still early days for these topics. Strategically positioning oneself while general attention is elsewhere is likely to yield substantial dividends in the coming years.

Europe, as a continent, has quietly established itself as a leader in DeFi, with countries like Italy and France being the birthplaces of notable projects in this space. It would be unwise to ignore the advantageous market position gained in this respect. With the total value locked in DeFi still comfortably exceeding $45 billion, it is evident that DeFi has weathered the bear market and is far from being knocked out. It is poised to make a comeback in the next market reversal.

With innovative developments like ERC-4626 on the horizon, unlocking a wealth of exciting prospects, it is safe to say that we have yet to witness the true strengths and potential of DeFi. If the EU can take the lead and guide innovation in this domain, it will solidify its place in the forthcoming financial revolution that has been brewing for the past few years.

Over the past decade, cryptocurrency has undergone numerous reinventions and transformations, yet its promise of a new form of money remains its strongest premise. Digital assets thrive best in a digital environment. The lessons learned from previous security token failures should remind us that we are not yet prepared for a seamless intersection of the digital and physical realms. To ensure the simultaneous success of these two realms, there must be a comparable level of excellence, if not an identical one.

This level of excellence is currently lacking in the EU when it comes to digital and crypto assets. Therefore, it should remain the focus in the short term.


Join us

- Advertisement -