European Union (EU) Competition Chief Margrethe Vestager has challenged claims that new artificial intelligence (AI) laws could harm innovation. Instead, she argues, they create legal certainty for tech companies warning to operate in the EU, even as crypto businesses come into alignment with the region’s crypto regulations.
Vestager said the laws would guide the building of models like OpenAI’s Generative Pre-Trained Transformer system. Her statements come after French President Emmanuel Macron criticized the new policy as too restrictive.
EU Chief Argues for Happy AI Middleground
Vestager suggested knowing what to expect from AI models once they are industrialized is important. At the same time, she cautioned against overregulation and a thoughtful application of the laws so as not to stifle businesses.
“It is important that you do not have any regulatory over-reach, that innovation and research is promoted again.”
Macron had previously accused the new legislation of disadvantaging European tech companies in the AI race. He said that while it was good to regulate “faster and much stronger” than other regions, the laws may restrict EU businesses such that they are no longer viable.
The companies will then lose market share to bigger US rivals. Vestager contends that regulations can foster trust that will result in greater investment and use of the technology.
Read more: ChatGPT vs. Google Bard: A Comparison of AI Chatbots
Laws Can Foster Trust, But Hurdles Remain
EU regulations for crypto have not caused businesses to lose ground. Instead, they have created legal certainty that can help businesses foster trust.
Europe’s Markets-in-Crypto-Assets (MiCA) regulations, which exchanges have until next year to comply with, specify how exchanges may offer stablecoins. In the meantime, some issuers are working towards compliance.
Circle, the issuer of the world’s second-largest dollar-backed stablecoin, launched its euro-pegged asset EURC on Solana to complement the coin’s presence on other networks. EURC struggled to attract volumes amid negative interest rates, but Circle’s expansion suggests it sees a future for the asset. France’s Societe Generale, a traditional bank, launched a stablecoin called the EUR CoinVertible this month, which is a major stamp of approval.
In October, Coinbase selected Ireland as its European hub to work out its compliance with MiCA. The company said in a blog post,
“The regulatory clarity MiCA provides to the industry is hugely welcome, and shows that the region is recognizing the potential that emerging technology can provide.”
Read more: Top Crypto Exchanges and Trading Platforms in Europe
Former Bank of England Economist Alan Beattie believes the AI Act will be harder to implement than the EU’s data privacy rules, for example. Still, it is a step in the right direction.
“Someone needs to be thinking and legislating methodically about how its power can be channelled for good. The EU has had the first stab at doing so of any major jurisdiction. If the US or anyone else wants to have a go, they are welcome to try.”
So far, around 100 companies have voluntarily joined an AI pact to comply with the new AI regulations before the deadline. The president of the European Commission, Ursula von der Leyen, committed to helping companies fully comply with the Act.
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