This month marks 16 years since Satoshi Nakamoto’s white paper introduced the blockchain model. However, its origins date back to 1991, when Stuart Haber and W. Scott Stornetta first described a cryptographically secured block chain.
Although blockchain technology is primarily associated with cryptocurrencies and financial assets, some coins are designed for specific use cases. The rise of decentralized applications and smart contracts has enabled systems to manage areas as diverse as digital identities, medical records, and intellectual property.
According to the World Bank, more than 1 billion people in sub-Saharan Africa and South Asia have difficulty obtaining official identification documents, resulting in access to basic services such as education and health care. He says he can’t accept it. . Could blockchain be a key asset in solving such problems?
The use of blockchain in other areas that can have a significant impact on human rights will be the focus of our discussion with our next guest.
Ethereum’s role in decentralization: Vyara Savova speaks at ETHSofia
Vyara Savova is a Web3 and human rights lawyer. She is a PhD candidate focused on legal automation using smart contracts. Mr. Savova is also a senior policy expert at the European Cryptography Initiative (EUCI), a non-profit organization based in Brussels. EUCI aims to shape EU regulations that support open, permissionless, decentralized applications powered by blockchain technology.
Vyara says the transition to web3 was relatively smooth. “Especially because I’ve always been a geek who was intrigued by new technology and how it affects people.”
Ms. Sabova’s professional journey began at an NGO in London, where she completed a master’s degree in human rights law. After graduating with a master’s degree in human rights law, she joined a London-based NGO working on the human rights impact of the Arab Spring in Libya.
There she saw first-hand the difficulty of preserving evidence of abuse in such volatile conditions. To address this, she helped develop a cloud-based digital archive. “It seemed so innovative back in 2016 that it required many meetings with technical experts to understand the details,” Savova explains.
Over time, this led her to blockchain and Web3, expanding her approach to human rights without ever leaving the field.
Viyara Savova will be speaking at the first Ethereum-based event to be held at ETHSofia in the Bulgarian capital. The conference, which will be held from October 17th to 19th, will provide a platform for some of the most well-known names in the field, bringing blockchain developers and experts to a wider audience within the Eastern European region. You will have the opportunity to share your ideas.
Are there any real-world examples where Web3 applications are already having a tangible impact on human rights issues?
When it comes to identity, verification, and payments, some of the most promising use cases where blockchain and fundamental rights protection intersect are related to the provision of services to displaced and undocumented populations.
An example is the work undertaken by the United Nations Refugee Agency to create a blockchain-based humanitarian intervention program for displaced persons and other affected populations by the war in Ukraine. The program uses the stablecoin USDC for secure cashback payments.
The impact of such efforts cannot be overstated, especially when aiming to resolve other issues such as the lack of refugee documentation and the need for fair distribution of state aid and humanitarian aid.
What role do you think the EU will play in setting global standards for cryptocurrency regulation? How does its approach differ from that of other major jurisdictions such as the US and China?
What the EU very much wants to believe is that through the so-called “Brussels effect” it is an international regulatory trendsetter. Essentially, this means that any regulation passed at EU level will inevitably impact on the wider regulatory landscape and may even lead to copying and pasting of EU law by other jurisdictions.
A common example is GDPR. This has led to a fundamental shift in people’s perception of personal data and data protection rights, with undisputed implications around the world.
However, it is unlikely that the EU cryptocurrency regulatory framework set out by the Market in Cryptocurrency (MiCA) Regulation will be all that effective in changing the global understanding of what cryptocurrency policy should be. there is no.
The reason is that with MiCA, the cryptocurrency industry has entered the realm of traditional financial services, which have always been highly jurisdiction-specific. A good example is that there is no uniform understanding of what “securities” and “financial instruments” are, sometimes leading to opposing interpretations by US government agencies (particularly the Securities and Exchange Commission) and the European Union. It’s a fact. Regulatory authorities.
Can you tell us more about the European Crypto Initiative and how it contributes to the development of EU policy through it?
The European Crypto Initiative is a Brussels-based advocacy group founded in 2020 in response to the first (leaked) MiCA draft. MiCA is influenced by the Financial Services and Financial Products Framework and focuses exclusively on services provided by centralized organizations, but there was no clear exception for decentralized finance, or DeFi. We immediately thought that part of the reason was the lack of representation of DeFi projects before EU policymakers.
Therefore, EUCI will begin to fill that gap and represent both DeFi projects and blockchain protocols before decision-makers in Brussels, eventually leading to DeFi and NFTs being explicitly excluded from the scope of MiCA. It has become. Through direct meetings and information sharing with policymakers, we are seeking a more tailored regulatory approach that reflects the fundamental differences between decentralized infrastructure and the centralized infrastructure responsible for its control. We accomplished this by explaining the need for .
The latest news regarding Sam Altman’s Worldcoin project has been announced. He is avoiding the European market due to GDPR. Could you share your thoughts on what potential risks and opportunities come with such blockchain projects?
Blockchain as a technological infrastructure is fundamentally inconsistent with data protection due to its design and functional specificities. The problem becomes even more acute when these technical characteristics are combined with the risks posed by centralized operations, effectively combining the worst parts of Web 2.0 with the main problems of Web3. The Worldcoin project is a clear example of this, meaning it will potentially always be in conflict with the GDPR.
More precisely, WorldCoin focuses on the issuance of identity-tied tokens, and does so by scanning a person’s irises with a futuristic-looking device called an orb. On-chain identification and identity management is certainly a serious issue for the broader blockchain community, largely due to the pseudonymous nature of blockchain-based identities, but at least in the EU, the answer is There is no doubt that this can be obtained from private organizations.
Having said that, I personally believe that Europe will solve some of its on-chain identity problems through the potential future use of frameworks such as the European Digital Identity Regulation (eIDAS II) and the EU Digital Identity Wallet. I believe I’m on the right path.
What is your assessment of CEE’s efforts in regulating the blockchain/crypto space? What do you think needs to change at the organizational and community level?
The CEE region is highly diverse with respect to each country’s approach to regulating cryptoassets and cryptoassets-related activities. Countries like Estonia have tried (and, objectively speaking, failed) to establish themselves as crypto hubs by adopting crypto-specific frameworks, while other countries, including Bulgaria, have It focused only on anti-laundering (AML) risks and simply ignored the crypto market. It brings.
What is happening now is an EU-wide unification of a common framework through the adoption of MiCA in parallel with a brand new AML framework focused on crypto remittances, so in the long run I can’t say the approach is better.
However, due to the EU-wide framework, gaps in the preparedness of various member states have been observed, and in fact they are often understaffed and lack the specific expertise needed to regulate cryptocurrencies. It is actually having an impact on the operations of each institution that operates. , and the community will need to adopt a fundamentally different approach to what cryptocurrency businesses are and how they operate.
What are the most pressing legal and regulatory challenges facing Ethereum in Europe?
Ethereum is a constantly changing creature, resulting in a rapidly changing set of regulatory issues. In its current form, some of the specific aspects that regulators are investigating are staking (and proof-of-work in general, which has been adopted by Ethereum to replace the less energy-efficient proof-of-work).・Impact of staking consensus mechanism) and maximal. Extractable Value (or MEV – refers to the complex process of value creation and distribution when a new blockchain block is created and the transactions within that block are ordered) and some issues around infrastructure security. There is.
What’s next in Web3 regulation right now? What will you be involved in in the coming months?
Tokenization is undoubtedly one of the most widely discussed topics and is also known as Real World Assets (RWA). The European Commission is currently investigating this issue, meaning it could lead to a specific regulatory framework.
Regarding our regulatory engagement in the coming months, apart from upcoming topics, we are also working hard on developing MiCA implementation standards and guidelines. Essentially, with the adoption of MiCA, we just have a blueprint and from now on, in parallel with specific day-to-day regulations, authorities such as the European Banking Authority and the European Securities and Markets Authority will through efforts to shape applicable regulations. The application of MiCA requirements is carried out by the competent authorities at member state level.
All of the above means we are busier than ever, with more legislation relating to both financial services aspects and technical details such as software developer responsibilities. The situation is likely to get even worse as the crypto framework impacts the cryptocurrency industry.
Last but not least, please tell us more about your time at ETH Sofia. What do you plan to share on the panel? Also, please let us know if there are any topics you would like to discuss.
The ETH Sofia Regulatory Committee provides a great opportunity to discuss the practical effects of MiCA, as well as the biggest questions regarding DeFi and its regulation. The conference organizers have done a great job of inviting great experts with extensive experience both in more traditional centralized situations and in decentralized finance. I look forward to an interesting and very practical discussion about the future of the cryptocurrency industry.
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