Case Studies
From binding AI treaties to crypto regulation to the future of cyberspace, these three case studies map the fault lines of digital governance and where EU leadership can make a real difference.
Anchoring Global AI Governance
After two years of complex negotiations and political trade-offs, the Council of Europe (CoE) adopted the world’s first legally binding treaty on Artificial Intelligence (AI), the EU AI Act. Will it become the world’s dominant framework?
Key Findings
- The first binding international AI treaty is an important step for global AI governance, but major compromises during negotiations may limit its impact. These concessions include weaker rules for the private sector and exemptions for national security uses of AI.
- Some compromises, however, also made the treaty more robust, by ensuring it was palatable to a wider range of countries and flexible enough to respond to future technological change.
- The treaty’s legitimacy and democratic inclusiveness were impacted because participation by civil society, industry, and other non-state actors (NSAs) was limited. Major AI powers such as China were also absent.
Key Reform Potential
- Lead by example through ratification and alignment. After signing the Framework Convention of the AI Act, the EU should ratify it, ensure alignment with EU law, and encourage domestic institutions to incorporate the treaty’s principles into their work.
- Advocate for a Conference of Parties that is inclusive, transparent, accountable, and adaptive. This means creating structured channels for civil society participation, publishing state compliance reports and CoP assessments, and introducing a review process to evaluate national implementation.
- Invest in capacity-building and outreach. A diplomatic initiative aimed at promoting the treaty could position the Framework Convention as a cooperative alternative to power-driven technological competition.
- Align the Act with EU external digital policy. It should integrate the treaty’s principles into global efforts such as the UN’s Global Digital Compact as well as into bilateral digital partnerships.
Key Actor Positions
The EU promotes a flexible, principles-based approach to AI governance, combining binding obligations with rights-based safeguards to ensure long-term durability. It also accepts compromises on national security exemptions and inclusivity to secure broader agreement.
The US prioritises flexibility and political sustainability in AI governance, favouring high-level principles over binding obligations to maximise participation. It also agreed to limit NSAs’ role in drafting, reducing inclusivity.
-> Read more about actor positions in the report
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The Shifting Sands of Cryptocurrency Regulation
As cryptocurrencies have grown from niche digital assets into a significant force in global finance, questions about how to regulate them have become increasingly urgent. How much progress have states made in governing this area?
Key Findings
- The Financial Action Task Force, the Financial Stability Board, and the Basel Committee on Banking Supervision have created international guidelines that can help reduce crypto-related risks, but only if states actually put them into practice.
- US disengagement under the Trump administration has weakened these global standards by making them less credible and harder to enforce.
- The EU has so far taken a cautious, multilateral approach. It has tried to align its own rules with international standards, while also developing initiatives such as the Digital Euro.
- As cryptocurrencies become more important in the global financial system, stronger international cooperation – and continued EU leadership – will be essential.
Key Reform Potential
- The EU should provide stronger leadership within global crypto governance and should champion an effective and coordinated approach. Without it, fragmentation could undermine both financial stability and democratic oversight.
- The EU should preserve its dialogue with the US through the various transatlantic channels that remain open – even if opportunities for seeing eye to eye currently appear limited.
Key Actor Positions
The EU is taking a cautious approach to cryptocurrencies, favouring strict regulation and rigorous requirements on market actors and stablecoins over outright prohibition.
China has banned international cryptocurrencies domestically to safeguard financial stability and state control, while promoting its own digital yuan. To restrict remaining crypto-related risks, it supports restrictive multilateral regulation.
Under the Biden administration, the US took a sceptical approach toward cryptocurrency and supported multilateral regulatory efforts. After the 2024 elections, the Trump administration shifted to a crypto-friendly approach.
-> Read more about actor positions in the report
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Regulating Cyberspace
Cyberspace has become a key domain of global digital governance – one facing rapid change, geopolitical tensions, and diverging regulatory visions. Are the current multilateral processes up to the challenge?
Key Findings
- UN efforts to regulate cyberspace have shown mixed results in terms of their robustness, effectiveness, and democratic participation.
- Geopolitical tensions, economic competition, and competing state visions of cyberspace have often limited what UN initiatives can achieve.
- The Cyber Open-Ended Working Group (OEWG) and the Internet Governance Forum (IGF) have helped make cyber governance discussions more inclusive, but both platforms struggled to keep up with rapid technological change and to produce concrete outcomes.
- The IGF offers an open platform for debate but lacks decision-making power, while the OEWG faces the challenge of reaching consensus among many states with diverging interests.
- In 2026, UN cyber governance became more consolidated: a new Global Cybersecurity Mechanism replaced the OEWG, while the IGF was made a permanent UN forum with stable funding and staffing under the Department of Economic and Social Affairs.
Key Reform Potential
- A single, enforceable model of global governance is unlikely to emerge: Western countries will likely prefer voluntary, non-binding norms, whereas China and Russia will advocate for a legally binding international treaty to enshrine states’ rights to cyber sovereignty.
- Rather than a singular, enforceable global governance model, the future of cyberspace will likely be defined by coexisting, sometimes competing governance structures in which certain agreements find traction among like-minded actors.
Key Actor Positions
The EU positions itself as a champion of multilateralism and a defender of a rules-based international order as a tool to address global challenges like cybersecurity.
China aims to revisit existing cyber norms and to introduce new binding commitments that more closely reflect its interests, establishing cyber sovereignty and information security as central pillars of its cyber governance approach.
The US advocates a non-binding approach to cyber norms, emphasises voluntary frameworks, and strives to limit platforms that might allow authoritarian states to influence cyber governance.
-> Read more about actor positions in the report
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