Practical Challenges of EU Laws: From Climate to Crypto

Transcript

Okay, so hello. I'm supposed to give you some refreshment talk in under 10 minutes. So to really refresh you, we will cover several thousands of pages of European regulations so that it can enlighten you. Uh, I'm Veronika Civinova. I'm a lawyer here in Prague. I'm also doing some research in the area of sustainability. Um, we are 1 year in. We are We have 1 year of MiCA behind us.

Uh, MiCA is European regulation which is directly applicable in all 27 European states and it's aimed at crypto crypto providers and crypto products. Also, there is 1 year of the new European Parliament behind us. And we know that climate and crypto are really one of the main topics now in the European Union. So there are two parallel tracks. One of them is climate and the other one is crypto.

And what I would like to cover is whether they are really in conflict as it's sometimes shown on media or if they can coexist in some sort of way. So let's look at this. So why we regulate crypto? We need to have crypto products and providers trustworthy. Uh, we need to have good governance, the technology, capital, people, everything. And we really need to protect clients and markets.

What do we have for sustainability? We need to have trustworthiness. We need to have governance. Uh we need to have good data. And we need in the end to protect clients and markets. So, what's the problem here? They are actually uh the very same. So, uh can we combine them? Can crypto be sustainable? Uh yes, but it's important to say that sustainability and climate are not the same things. Sustainability comes from uh UN documents, and it has actually three parts in it. There is environment,

social part, and also corporate governance. And they uh do differ uh inside them. So, there are five parts of environmental uh data that we look at, which is climate, often shown as to be the same as sustainability, but it's not true. Then pollution, water, biodiversity, and resources. Also, in the social part, we have uh four pieces to look at. There's the first piece of data, uh own workforce. We are looking at employees.

Uh we are looking at suppliers, local communities, and consumers. And in the end, there is the good governance, so how we conduct business. If we look at crypto, we can definitely find some points here that crypto is probably uh really supporting, maybe more than traditional uh finance and traditional governance. Uh for example, the area of consumers or local communities, the area of business conduct can be much better than in the traditional world. So, we can say that if we support sustainability, um it means that we support at least one

goal. And I think that this can be done in crypto. Uh the tricky point here is to say that something is sustainable, it means that it does not significantly harm uh one of these points. So, if we say that crypto product or crypto company is great for business conduct or local communities, it cannot significantly harm, for example, often discussed climate.

Because if it does, then we cannot say that it supports sustainability. But as long as all the other things are harmed, but not significantly, or they are not harmed, that we can say that crypto product, crypto company, crypto business is sustainable. Uh so, how can we show that crypto product or company is sustainable? Uh there are some standard templates, but only in certain areas of law. Uh the first one is financial world.

This is far most regulated part of uh European laws, and we can see some pretty standardized forms that we can show if we show sustainable products. It's questionable, however, if these really fit to crypto, but maybe we can try that one day. Uh then there are some standard reports for large companies. Usually, crypto companies do not qualify for these. So, what else do we have? We have some other ESG reports that are voluntary at the point. So, uh they are supposed to work for small and medium enterprises and for some smaller

products. Uh for example, I mentioned that we are doing some research. We are working on ESG simple, which is uh uh tool for small and medium enterprises to really show whether they are sustainable or not. You can try that. It's for free. Uh but there are tons of other reports and you can also create your own to really map the sustainability. So, I think that there are also tools to show that products in crypto are sustainable.

So, in the end, what we can say, uh crypto and climate can be combined, but this can be tricky to some point. It depends on the technology. However, if we speak about crypto and sustainability, it can absolutely be combined, no problem. So, if the European Union regulates crypto and it regulates also sustainability, it does not mean that they are in conflict. They can really cooperate well. So, um in the end, regulating crypto does not mean banning Uh sustainability is not really the enemy of crypto. And if we apply

principles and we do not go by the uh single rules, which are sometimes ambiguous and they are applied really hardly to crypto, we can really use sustainability for the crypto and show that we are really doing good for the society, uh for the governance, and maybe even for the environment here. You can try it yourself. It's not really hard. Thank you. >> That was indeed very fast. Thank you very much.

Um we have one last speaker, last but not least, to be exact, um Thomas Martikan as a software