Europe Moving Forward On Blockchain Technology And Regulations
The European Commission will launch a blockchain pilot research project “to build up technical expertise and regulatory capacity.” The pilot, which has an estimated budget of €500,000 for two years, includes the creation of a European Union Blockchain Observatory.
“The purpose will be to inform and assist the European Commission in understanding what role – if any – European public authorities should play to encourage the development and up-take of these technologies and to formulate related policy recommendations,” the EU announced last week.
The observatory will also function as an EU hub to discuss developing topics, use cases, opinions, and concerns with blockchain and distributed ledger technology. The announcement did not specify the composition of the observatory. However, as per the EU the call to tender will be published in 2017. Once created, the announcement stated that the observatory will be expected to conduct a list of tasks related to the EU’s blockchain initiative such as:
- Provide prompt overviews on current initiatives related to blockchain and/or DLT around the world.
- Follow the developments of the technology as it pertains to European industry. This includes all related challenges and opportunities.
- Provide expertise on intersecting topics within the blockchain industry such as infrastructure, governance and validation, smart contracts, regulation and interoperability challenges.
- Create and exhibit a European blockchain community platform.
- Explore possible use cases that add value to the EU.
Despite uneasiness with cryptocurrencies, which are based on blockchain technology, the EU has a positive outlook on blockchain and digital ledgers. In February, the EU released an in-depth analysis that stated regulation could allow innovators guidance as they began developing the technology in the EU.
“Indeed, a recent European Parliament report on virtual currencies acknowledged the increased risks, which will require enhanced regulatory capacity and adequate technical expertise, while calling for a proportionate EU regulatory approach in order not to hamper innovation at such an early stage,” the analysis stated.
The analysis also set forth a list of key areas currently associated with blockchain technology, such as currencies, digital rights management, patents, e-voting, smart contracts, and supply chains. That also suggests that the European Union expects more member nations to face questions regarding blockchain and digital ledgers, beyond Germany, The UK, and Estonia - three members where blockchain technology is gaining traction.