Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro. Want to know how rough things are getting for crypto in the U.S.? Industry leaders are starting to hold up the European Union as a potential bastion for digital currency. “We fully expect Europe to become a natural hub for responsible participants going forward,” says Susan Friedman, international policy counsel with the embattled crypto firm Ripple. Sure, Europe has been at the vanguard of cracking down on Big Tech and crypto. It played a major role in the demise of Facebook's failed stablecoin, known as Libra and later Diem. But as POLITICO’s Bjarke Smith-Meyer and I report, the European Union is about to pull ahead of the U.S. with a set of formal laws tailored to crypto businesses. It’s in stark contrast to the patchwork of state and federal rules in America, where Washington regulators are increasingly enforcing old-school banking and investment laws on digital asset firms. It’s going to be the status quo here for the foreseeable future, with U.S. lawmakers at odds over whether to embrace or curtail the digital asset market. The “regulatory clarity” crypto lobbyists say they want? The EU will have something to offer on that front when its new rules take effect next year. European lawmakers like Stefan Berger are promoting the set of policies — known as Markets in Crypto-Assets, or MiCA — as “the best framework in the world in which companies can develop.” This is already becoming a talking point for some in the U.S. crypto lobby, which is seriously lacking political capital after the market nearly collapsed. Advocates are looking for anything to light a fire under Congress. But let’s get real. Dante Disparte, chief strategy officer at stablecoin issuer Circle, isn’t buying the pitch that the EU will become a safe haven. He would know from experience. Disparte was one of the leaders of Libra, which triggered the EU's move to enact new crypto laws after officials smashed Facebook’s ambitions. He’ll take U.S. regulatory ambiguity over the EU model, which he described as “five years of hurry up and wait” — even if America’s patchwork approach means it’s “stuck in a fintech constitutional crisis.” “The rest of the world is looking for the puff of white smoke — what policy posture the United States will take,” he told MM. “And to date, we have not concluded that papal conclave on fintech.” What should we cover this week? — Send tips to zwarmbrodt@politico.com and ssutton@politico.com.
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