Is Belgium Trying To Kill Crypto?

New regulations from the Belgian Financial Services and Markets Authority (FSMA) introduce stricter rules for crypto-asset advertisements. These include notifying the FSMA ten days before launching an advertising campaign. Also a disclaimer at the bottom that says, “The only guarantee in crypto is risk.” Belgium’s latest crypto regulation has sparked a debate about how advertisers should talk about digital assets.

By popular demand, many banks have added crypto services to their financial offerings. This year alone, Germany’s Neobank N26 expanded its crypto trading services to Switzerland, Ireland, Belgium and Portugal.

Naturally, N26 will want to share the news with existing as well as potential customers. However, FSMA’s new mandates could undermine supply, making it more difficult for customers to buy crypto.

Europe’s changing tides

Across Europe, lawmakers are moving quickly to change the way companies and individuals talk about crypto online. In France, lawmakers proposed an amendment to bill 790 that effectively criminalizes the promotion of crypto on social media. The European Union has drafted a law that requires prohibitive requirements to cover risks associated with crypto.

In the past, many countries have previously promoted a crypto-friendly landscape to welcome innovators. But in 2023, the tide seems to have changed. And Belgium’s proposed crypto regulation seems punitive.

Not only has the regulation targeted the most important means of communication within the crypto ecosystem – the internet – but the language is markedly harsh. The full disclosure is “Virtual currencies, real risks. The only guarantee in crypto is risk.” This reads as an anti-crypto tagline in itself. It is obvious that the line was not written to inform customers of the risks inherent in any investment. Rather, to scare people away from crypto.

Intended consequences of Belgium’s crypto regulation

Within the crypto industry and without, market conditions tend to define attitudes toward crypto as both a technology and a resource. In the wake of FTX, it’s easy to call everything crypto a scam. And in the midst of a brutal crypto winter, it’s easy to view digital assets as a losing bet. However, most good investments extend far beyond a single bull cycle. After all, the S&P 500 has ups and downs.

This mindset needs to change, otherwise countries can be stuck with restrictive regulations that stifle innovation. Furthermore, until lawmakers make a concerted effort to understand crypto, laws like these will continue. Disconnect between entrepreneurs and consumers will leave businesses without an audience and consumers locked out of opportunities.

Laws should protect citizens, but not by harming trusted businesses. As with any investment, profits are not guaranteed. But saying something intentionally ominous about an asset class is pointed out in a way that the law shouldn’t be.