August 02, 2018 03:09:05
The European Commission’s blockchain advisory body has warned that the EU’s lack of legal and regulatory certainty can stop blockchain development and the Union’s leading role in innovation. On August 1, the European Blockchain Observatory and Forum published its first-ever report analyzing the blockchain industry in the Union and outlining several recommendations to the bloc.
The Forum took the opinions of key players in the EU administration, member-states officials, and the European blockchain industry. Analyzing the challenges that blockchain business meets, the body called for EU-wide actions that should stop the uncertainty.
“Such [legal and regulatory] lack of clarity can put a chill on innovation. Entrepreneurs understandably fear investing heavily in products only to find that what they have done is not compliant, potentially exposing them to financial or even criminal penalties. This is a serious issue. While it is possible in certain cases to get rulings from the authorities ahead of time, the process is often slow and cumbersome, slowing down businesses. Nor is it always clear if a ruling in one country or region is binding/legal in others,” the advisory entity said.
The Forum delineated five steps that the EU should undertake. The first and the most urgent issue is resolving the tension between cryptocurrency technology and the new General Data Protection Regulation, or GDPR, which had been written before the blockchain expansion and had not counted the specific characteristics of distributed ledger technology (DLT). For example, GDPR obliges companies to ensure the sanitization of personal data on consumer complaints, but this data is essential for DLT.
Second, the Union should invest more in education and research to tackle the blockchain talent shortage.
“Third, Europe should continue to drive the adoption of blockchain technology by the public and private sectors. The pursuit of flagship projects that provide real benefits to users and demonstrate the value-add of the technology, will have the dual effect of creating a domestic market for innovative entrepreneurs, and encouraging investors to fund more local projects.”
The European Union should also promote blockchain collaboration and continue to give public access to its DLT policies and measures to blockchain business and community, the group wrote.
The European Commission launched the European Blockchain Observatory and Forum in January after a call from the European Parliament. The advisory body is under the aegis of the European Commission’s Directorate General for Communications Networks, Content and Technology (DG CONNECT). However, the Forum’s recommendations are not obligatory for the EU.