Austria’s Kocher Demands Europe Slash Outdated Rules Instead of Piling On New Crypto Regulations

Europe's regulatory machine keeps churning—but Austria's finance chief says it's time to dismantle the old framework rather than bury crypto under fresh red tape.

The Regulatory Purgatory

Kocher argues Brussels should focus on cutting obsolete financial regulations that predate blockchain technology by decades. The current approach of layering new crypto-specific rules on top of legacy systems creates what he calls 'regulatory schizophrenia'—where digital assets get judged by standards designed for traditional finance.

The Innovation Drain

Every new compliance requirement without corresponding cuts to outdated rules pushes European crypto firms closer to relocation. The continent risks becoming what one banker called 'the world's most beautifully regulated ghost town'—perfect paperwork, zero innovation.

Meanwhile, traditional finance institutions keep lobbying for regulations that would force crypto into their existing boxes—almost like they're trying to protect business models that blockchain could make obsolete. How very surprising.

Germany’s Nagel calls for simpler rules, not less oversight

Joachim Nagel, head of Germany’s Bundesbank and also part of the ECB’s Governing Council, doubled down on this on Friday in Frankfurt. He said Europe needs to stop dragging its feet on simplifying the post-crisis rules. “We should boldly MOVE forward on this path,” Joachim said. “Simplification is feasible, according to the motto: as complex as necessary, as simple as possible.”

Joachim is part of a task force the ECB launched back in April. The group is working on making banking rules easier to follow without stripping away safety. His idea? Only common equity should count toward a bank’s main capital requirements. That means fewer overlapping demands and fewer moving parts. Tier 1 and Tier 2 capital tools could still be used, but only to handle resolution cases, not for regular capital compliance.

That idea is already turning heads at the ECB. Bloomberg reported Tuesday that Germany’s proposal has become one of the most controversial topics in the ongoing push to fix the ECB rulebook. Some officials think it could force certain banks to raise more capital than they expected, and might even break progress on aligning rules across Europe.

Joachim’s second suggestion is to combine a bunch of capital buffers into a single one. He said this wouldn’t scrap national regulators’ roles, it would just make the whole system less messy. The task force, which includes governors from France, Italy, Finland, and Estonia, plus ECB Vice President Luis de Guindos and board member Sharon Donnery, already gave an interim report to the ECB’s Governing Council in July. The final version is due in December.

The pressure to act comes as banks in the eurozone are sweating over the deregulation trend sweeping through the U.S. and U.K. While central bankers like Martin and Joachim are driving the technical part of the debate, actual law changes will come down to the European Commission and parliament.

Still, Joachim isn’t waiting for politicians to move first. “We’re at the beginning of a long road,” he said. “I want to advance the discussion with our national and European partners.”

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