EU moves to purge Huawei and ZTE from critical infrastructure
The European Commission is preparing a Cybersecurity Act that would require EU member states to remove equipment from designated “high-risk” Chinese vendors such as Huawei and ZTE from sensitive infrastructure. The scope of the crackdown is expanding beyond telecoms to include security scanners, solar inverters and wind turbines. Germany has already set firm deadlines: remove Huawei and ZTE from core networks by 2026 and from access networks by 2029; its regulator is proposing to classify Radio Access Network (RAN) hardware as “critical.” Other member states differ—Spain signed a €12.3m contract in July 2025 to use Huawei OceanStor servers for judicially authorised wiretaps, prompting U.S. warnings about intelligence-sharing risks. The Commission has previously probed Chinese companies (e.g., Nuctech under the Foreign Subsidies Regulation) and is investigating Chinese wind turbine makers like Ming Yang for potential unfair subsidies. Brussels says the moves are aimed at reducing dependence on Chinese and major U.S. technology and achieving technological self-reliance, leaving Europe largely reliant on Ericsson and Nokia for telecom alternatives. Beijing calls the measures market-distorting and warns of economic retaliation.
Neutral
This policy is primarily geopolitical and regulatory rather than crypto-native, so its direct impact on cryptocurrency markets is limited—hence a neutral classification. Short-term: traders may see sector rotations—European telecom and Chinese technology stocks could move on enforcement signals and contract news (e.g., Spain’s Huawei deal) but crypto markets are unlikely to respond materially unless broader technology supply shocks spill into investor risk appetite. Longer-term: the push for European technological self-reliance could indirectly benefit blockchain projects promoting sovereign infrastructure, onshore data storage, or decentralized alternatives, potentially increasing demand for related services and tokens. Historical parallels: past national security tech bans (e.g., U.S. restrictions on Huawei) caused volatility in equities and vendor-specific supply chains but only marginal, short-lived effects on crypto markets. Traders should monitor: EU legislative timelines, member-state compliance announcements, major contract disclosures, and any wider tech-sector sell-offs that might affect market risk sentiment.