European Parliamentarian Eva Kaili switched to cryptocurrency when she watched her friends lose their savings in the wake of the global financial crisis. The crisis came during the Cypriot financial crisis in 2012 when the Cypriot banks collapsed and a levy was imposed on many depositors to finance the resulting bailout.
“A lot of my friends lost their savings because banks suddenly closed and no one would guarantee their savings,” she says. “So that was quite a shock.”
“And then I thought, okay. If this system couldn’t protect us … we can’t restore confidence, we have to have alternatives so that the system itself improves citizens’ opportunities, and that’s why I started looking into decentralization . “
Today, Kaili is one of the most outspoken supporters of the introduction of cryptocurrencies and blockchain technology on the European political stage.
Birth of a Bitcoiner
A trained architect, Kaili became a popular news anchor for Mega Channel before she was elected to the Greek Parliament in 2007 at the age of 29 for the Panhellenic Socialist Movement Party. “They told me that it was impossible for a young person to take part. I said okay, let’s see if that’s true … and it seems when the citizens have more [candidate] Decisions, they’re actually pretty daring, ”she says.
The Greek sovereign debt crisis caused the economy to collapse in the months following her election, making it the perfect time for a brave politician to step up. The crisis also tested Kaili’s own convictions. “You couldn’t be naive, you couldn’t be romantic or idealistic, you had to find solutions and start exploring all the options I had as a politician. I tried to think outside the box.”
Kaili thought decentralization was a possible solution as it introduced the concept of peer-to-peer networking while using uTorrent to pirate files with her friends at Aristotle University. Torrents “seemed like a miracle,” she says. Why couldn’t value be exchanged in a similar way?
Eva watched YouTube videos about these new technologies and began to understand bitcoin. It was the out-of-the-box solution she was looking for and it just clicked. Indeed, this year many Cyrpriots were looking for alternatives to the old financial system. In 2014, producer Zhou Tonged released a music video modeled on the Swedish house mafia, which summarized the feelings of many of their compatriots.
There was a time when I thought my government was getting it right
But they have crossed the line and now I am fighting for my royal life
Laiki [bank] I took my money and now I think how this will all end
My money is with Bitcoin because what they did they can never fix
Just when the Cypriots lost their faith
Then I learned something about the blockchain
I still remember how everything changed
Don’t you worry, don’t you worry, child
Vote on the blockchain
Kaili has been a member of the European Parliament since 2014. She says blockchain voting is a direct application that could save the block 90% of voting costs while protecting against voting fraud. She tells of the first month of the COVID-19 lockdown, during which the EU Parliament was unable to develop proper legislation and MEPs stuck at home had to print out their voting forms before physically signing them, scanning them and sending them back by email.
Kaili is confident that blockchain voting offers benefits beyond mere cost savings because “you can actually see participation live,” with biometric controls potentially being used to ensure security. In keeping with a virus-ridden world, anyone could vote from their mobile devices without having to visit a physical voting center. In their view, the lightness of this system would increase voter turnout and thus strengthen the democratic process.
Europe as a blockchain hub
Kaili, who belongs to the center-left European Progressive Alliance of Socialists and Democrats, is far from a crypto-anarchist or cyber-libertarian. She has no ideological desire to give up the currency monopoly per se, but believes that the current monetary system is not yet mature enough to protect people. Because she saw the euro system fail and put her country back a decade on a spiral of austerity, she believes alternatives are necessary.
For Kaili, the purpose of Bitcoin and Blockchain technology is not to forcibly overthrow and burn down an economic or political system through revolution. Instead, they are instruments for strengthening and improving the system by promoting trust, stability and efficiency.
“Blockchain is the definition of a trustworthy environment.”
According to Kaili, the biggest advantages Europe can offer blockchain startups are legal certainty and increasing standardization in the internal market. She sees Europe’s general approach to cryptocurrencies as less controversial than that of the United States, where entrepreneurs sometimes find themselves “in a really complicated situation with the SEC” despite good faith efforts.
A European digital currency
Not everyone in the EU is as ready as Kaili to embrace financial innovation. In December 2020, German finance minister Olaf Scholz declared Facebook’s stable coin project Libra, now called Diem, to be a “wolf in sheep’s clothing … we must do everything to ensure that the currency monopoly remains in the hands of the states.”
Kaili is more open:
“I wouldn’t go that far, I wouldn’t say that we have to control everything. He says that, but then people have lost their savings because they trusted the euro. They trusted their banks, their banking system and still have everything lost. “
While looking to offer more choices, Kaili also fears that large foreign corporations or undemocratic regimes could become the issuers of a global currency. For them this would be unacceptable as Europeans would lose even more control over their personal transaction data:
“You have the big platforms; Most of them are not based in the EU. You have Facebook, Google, Amazon, Alipay and Alibaba, all of which have access to European data, manipulate your perceptions and target you, ”she says, adding that proper regulation of digital currencies would be needed to ensure these mistakes were made does not occur repeatedly.
“We are forced to regulate the internet for European citizens to ensure that basic European principles and people’s rights are protected.”
This means Europe needs to spend better money than competing tech giants. One reason for this is that Kaili is a huge proponent of a European digital currency. She envisions something much bigger than simply recreating the euro in a digital ledger.
“I think we’ll have more options,” she says. “We’ll have it as money, as gold, as a store of value, and I think we’ll have it as a way of crowdfunding.”
Kaili says the best way to generate financial innovation is to create “appropriate legislation.” She has campaigned for the creation of hybrid legal sandboxes to enable the development of blockchain products.
This will soon allow people to invest in companies through tokens issued by startups and midsize companies for access to liquidity.
“Of course we should have a monetary system that serves to offset systemic risks from crises. In order to operate crisis management, however, we also have to look for innovative solutions […] We need to be able to create new laws for these new technologies. “
How do the other politicians and bureaucrats at EU level feel about it? Kaili laughs and reveals both humor and frustration.
“Okay, so blockchain in general, everyone is positive. When it comes to currencies, everyone is skeptical. “She says this is largely due to a lack of knowledge and understanding on the subject. Kaili believes that very few of her colleagues could explain what an algorithm is. “We should understand that the world is changing […] It’s an unstoppable technology. “
A financial system for the future
This talk of unstoppable technology begs the question of whether Kaili is concerned about cryptocurrencies being used for tax evasion. After all, she believes in governments that take care of their people and that requires a tax base.
She laughs again and says with a touch of irony:
“Elias between you and me, I think the best way to find those who want to evade tax evasion is to put them on a blockchain because nothing is ever gone forever.”
She adds, “I understand that there are decentralized coins and that there are indeed ways to trick and fool the system, but you can do that with cash, you can do that with euros.” She believes that blockchain could make it possible to keep track of all financial transactions and investment activities in real time so that the relevant taxes are automatically applied despite the complexity of a tax system in multiple countries. Essentially, Kaili envisions a financial ecosystem and network where taxes are simply built in, in a way not dissimilar to how transaction fees work in the Bitcoin and Ethereum networks, respectively.
“Of course we have to be careful not to overdo it, but I think it could give the government the ability to have the final say at the end of your profits or transactions without trying to ‘get’ them,” she says.
Automatic taxation could result in astronomical savings across the economy when you consider the time and effort that individuals and businesses now spend preparing and processing taxes.
This vision is in line with Kaili’s larger political agenda of pro-Europeanism, which aims to further integrate and harmonize Europe in order to build what some have called the “United States of Europe”.
Whether you find this vision utopian or dystopian, there is no question that Kaili is an ambitious and forward-thinking thinker with serious political weight.
Data protection as a Europe-wide value
Kaili is particularly heavily supported by young voters, many of whom have become cynical about governments and the digital world. However, blockchain excites them.
“We all know that we have to trust the system again or at least use the technology […] I have the feeling that the younger generations are interested in being able to trust the internet again. “
A big part of that is giving users back control of their own data, Kaili explains. Online service users should be able to grant and remove permissions to exchange data at will by getting some online goods to share certain data points that the end user is always aware of and controls. Building the future on blockchain could make this a reality.
“The EU is based on respect for your rights, and one of the main rights here is the right to privacy.” Data protection and security, says Kaili, are two equal pillars that European heads of state and government are unwilling to compromise.
I will close on a personal note by telling Kaili that after living on four continents, I am indeed the EU taking the most active steps to promote the rights and wellbeing of individual citizens in the online world. Europe is a kind of dynamic middle ground in an increasingly polarizing world. This is a big part of why I choose to spend my time here now. She seems satisfied:
“I think this is an example of how I see things and why I believe in Europe so much.”