EU throws its weight behind blockchain, as European Commission launches blockchain observatory
The Commission forecasts that by 2020, it will fund projects that could draw on blockchain technologies for up to €340 million.
Blockchain technologies have found more support, as the European Commission has just announced the launch of the EU blockchain observatory and forum.
The European Commission values blockchain technologies as a major breakthrough, as they bring about high levels of traceability and security in economic transactions online. They are expected to impact digital services and transform business models in a wide range of areas, such as healthcare, insurance, finance, energy, logistics, intellectual property rights management or government services.
The European Commission has been funding blockchain projects through the European Union’s research programmes FP7 and Horizon 2020 since 2013. It forecasts that by 2020, it will fund projects that could draw on blockchain technologies for up to €340 million.
European businesses are already offering blockchain-based solutions. Banks, insurance companies, and stock exchanges are engaged in pilot projects in this area. Many Member States have announced initiatives as they seek to reinforce their use of blockchain technology. The Dutch central bank (DNB), for example, has been working on four projects based on blockchain since 2015. The aim was not to launch a crypto coin, but only to understand the technique better. The results of these studies confirm that the technology is not yet mature enough to play a role in the Netherlands’ payment traffic – the system is too slow, too few transactions are executed per second, and the technology is not sustainable. The DNB notes that the technology is nevertheless interesting and may eventually offer opportunities in the financial world. The regulator underlines the benefits of blockchain for certain tasks such as the validation of documents, verification of identities and transactions.
The European Commission wants to build on the existing initiatives and ensure that they can work across borders.
ConsenSys, a global player now well established in Europe, has been selected as partner to support the Observatory’s outreach in Europe following a call for tenders launched last year. It will work in close cooperation with Commission services to run the EU Observatory and Forum, after having signed the contract on January 29, 2018.
In the meantime, the European enforcement agencies remain vigilant with regard to cryptocurrencies. As cryptocurrencies are increasingly used to finance criminal activities including terrorism, Europol has reiterated its commitment to coordinate across EU Member States and beyond in an effort to effectively respond to this rising threat.
At a recently held workshop organized by Europol, INTERPOL and the Basel Institute on Governance, the agencies agreed to step up their efforts to combat the misuse of cryptocurrencies by criminals and terrorist financiers to launder money and support other criminal activities. The enforcement agencies outlined their plans to take action against digital currency mixers/tumblers. The latter are designed to anonymise transactions, which burdens the work of law enforcement agencies to detect and trace suspicious transactions.