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When the MiCA Regulation was passed in May 2023, the European Union became the first major jurisdiction to provide what the digital currency and blockchain industry calls “regulatory clarity.”
While some have lamented that the EU’s regulations are cumbersome and complex, their purpose was never to please or facilitate the use cases they had in mind. Instead, it was to facilitate government and corporate use cases and help usher in Europe’s Digital Decade.
It looks like it’s paying off. On September 30, the European Blockchain Sandbox Initiative (EBSI) announced that 41 regulators and 22 countries from the European Union and European Economic Area have joined its second cohort. Authorities such as France, Spain, Italy, Belgium and the Netherlands are involved, along with companies working on various blockchain solutions.
What is the European Blockchain Sandbox Initiative?
In a nutshell, this is an initiative launched by the European Union to facilitate the development and testing of blockchain solutions within a controlled environment. The goal is to foster dialogue between regulators, innovators, and companies working on blockchain technology across multiple sectors.
Key aspects of this initiative include testing blockchain-based solutions in a secure environment, cross-border cooperation, regulatory guidance, and public-private sector cooperation. In other words, it’s a way for everyone to come together to test blockchain applications, provide feedback, and resolve any legal or regulatory hurdles.
EBSI will also support 20 projects with legitimate use cases based on blockchain technology. These are selected based on defined criteria, including legality, business maturity and alignment with EU policy objectives. Some of the companies selected to participate in the second cohort are working on real-world asset tokenization, blockchain identity, smart contract auditing, digital document management, and more.
The EU wants a fundamental transformation of the economy
EU authorities are gradually waking up to the reality that the bloc needs to catch up on innovation, especially in the high-tech sector.
Mario Draghi, former Prime Minister of Italy and President of the European Central Bank (ECB), recently said that the EU faces a “middle technology trap” where companies stagnate and rest on their laurels without promoting radical innovation. He said there was.
Draghi released a report calling for increased investment of up to 800 billion euros ($882 billion) a year, focusing on defence, digital technologies, energy transition and innovation. This corresponds to spending 5% of the EU’s GDP on these areas.
Critics say Draghi’s plan lacks specificity, but there is time to iron out the details. With the MiCA regulation paving the way for the blockchain industry and the AI Act clarifying the rules for the field, huge spending on infrastructure such as data centres, blockchain infrastructure and renewable energy will help the EU could transform from a technologically underdeveloped country to a world leader.
Opinion: Blockchain can help turn Europe into a technology leader
Blockchain technology should be at the heart of Europe’s economic plans. The efficiencies and cost savings it would enable would go a long way in repairing the EU’s image as a place that buries startups in time-consuming and costly bureaucracy, and smart contracts comply with EU regulations. can automate many of the processes required to
If DeFi becomes legal, it could free up vast amounts of capital and make it easier for companies to borrow, lend, and manage their assets. It’s no secret that one of the reasons tech companies head to the US once they reach a certain size is that it’s much easier to raise the capital they need to grow to the next level.
Blockchain technology can also dramatically simplify cross-border payments. The euro currency and Single Euro Payments Area (SEPA) remittances have made cross-border payments easier, but fragmented payment systems, AML/KYC requirements, and differences in banking systems still pose major challenges. facing. Blockchain and digital currencies will simplify this and streamline payments within the EU and EEA.
Even better, blockchain can help the EU emerge as a leader in a new technological frontier: AI. Issues related to digital rights, data provenance, and model transparency are familiar to those who study AI and address its implications. With detailed regulations guiding both, the EU is uniquely placed to merge these technologies and solve some of the problems.
Blockchain can and should be integral to the EU’s transformation plans. Will leaders see it on time? Initiatives like the European Blockchain Sandbox Initiative suggest it is on the right track.
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