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After months of monitoring and observing the "promising and challenging" potential of distributed ledger technology (DLT), the European Union (EU) is finally making a turn into the blockchain industry.
How it all started
Back in February 2018, the European Commission (EC) launched the EU Blockchain Observatory and Forum, aimed at supporting European cross-border engagement with the technology and its multiple stakeholders and to unite the economy around blockchain.
Since its official launch, it has released three thematic reports: the first one in July, the dubbed "Blockchain Innovation in Europe"; the second one in October, "Blockchain and the GDPR"; and the third one in December, "Blockchain for Government and Public Services."
22 countries – 21 EU member states and Norway – signed a Declaration that created a European Blockchain Partnership (EBP). During 2018, five more European countries joined the EBP: Greece and Romania in May, Denmark and Cyprus in June, and Italy – last month to join – in September. The partnership's main focus is on cybersecurity, privacy, energy efficiency and interoperability, all in full compliance with EU law.
As Mariya Gabriel, commissioner for the Digital Economy and Society, underlined welcoming the established of the EBP:
A new business opportunity to become a leader in the field of social security, public services and companies. )
Back in the fall, ResearchAndMarkets.com published a new report dubbed "EU5 Blockchain Technology Market (2018-2023)." In the report, the EU is expected to increase its investment into blockchain- and DLT-related projects from $ 94 million in 2018 to $ 386 million by 2020. The EC is liberalizing the industry's regulation and it creates a new task force that has become part of the industry.
Another move to a blockchain was made in October this year when the European Parliament formed a resolution titled "The resolution states that DLT" could affect all sectors of the economy, "but it focuses on several important spheres: finances, health care, transport, education, copyrights, public governance, data protection, and some others.
The agreement shows that the European Parliament has set itself up for the implementation of the legislative framework. Parliament is articulated several main features.
Health care sector
The potential of DLT implementation by the European Union. My Health My Data (MHMD), the EU-funded project, has been aimed at improving data efficiency and the reporting of clinical trials in the health sector, enabling digital data exchange across public and private institutions under the control of the citizens / patients. "
For the EU, the main focus is on the protection of personal data (followed by the General Data Protection Regulation, known as GDPR), which gives "people more control over how they store, manage and use personal data generated online, "says DECODE, another blockchain project funded by the EU. According to the document, blockchain "should protect the privacy of sensitive health data" and allow "citizens to control their health and benefit from wider health care ecosystem. "
Health and safety care sector with DLT "through electronic health data interoperability, identity verification and a better distribution of medication," as well as improving the management of health care systems.
Financial services
There are several major advantages of the DLT implementation for the financial sector within Europe. One of them is definitely the significance of the blockchain technology in financial intermediation by "improving transparency and reducing costs and improving costs."
The EC and the local regulatory authority for the implementation of DLT. "
Volatility and uncertainty of cryptocurrencies. It requires the EC and the European Central Bank (ECB) "to provide feedback on the sources of volatility of cryptocurrencies, identify dangers for the public, and explore the possibility of incorporating cryptocurrencies into the European payment system."
There are certain risks related to ICOs and the lack of clarity with respect to the legal framework applicable to ICOs, which could negatively affect the investment and funding potential of ICOs. The Parliament asks the EC and the national regulatory authorities "to identify criteria that enhance investor protection and articulate disclosure requirements and obligations for the initiators of ICOs" to avoid risks and dangers related to ICO projects.
The certainty and increase of the funding in the crypto space could increase investor and consumer protection and reduce "the risks stemming from asymmetric information, fraudulent behavior, illegal activities such as money laundering and tax evasion."
How bright is the future blockchain in Europe?
Meanwhile, the Distributed ledger technologies and blockchains resolution has more political significance than legal, as the EC is not required to do anything in response to these requests.
Last week, four major blockchain companies – including Ripple, the NEM Foundation, Emurgo (based on the Cardano blockchain) and "smart ledger" development firm Fetch.AI – formed "Blockchain for Europe" Association. It is aimed at helping the EU "shape the global agenda" on blockchain by providing education on the technology and the potential "smart regulation" of the blockchain industry.
The EC does not appear to be fully involved in promoting a global regulatory framework for the blockchain and cryptocurrency ecosystems. The general idea is to focus on the regulation of the technology on national levels.
A vivid example of it is another declaration signed on December 4 between the two southern European countries – including France, Italy, Cyprus, Portugal, Spain, and Greece. It was reportedly initiated by Malta, commonly known as the "Blockchain Island" of Europe. This declaration calls the EU for help to "promote DLT that is most associated with cryptocurrencies but is being used by governments to offer services to citizens."
Switzerland is another European country, but not a member state, that has a friendly regulation on the blockchain and crypto industries.
Europe has the ambitions to become "the global leader in the field of DLT," which can be seen from the number of initiatives taken place over the 2018 year. Still, it might want to consider bringing more power to them rather than just "raising the awareness."
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