On 8 October, Access Partnership attended an event to launch a new report, ‘Blockchain Now and Tomorrow: Assessing Multidimensional Impacts of Distributed Ledger Technologies’, prepared by the Joint Research Centre (JRC) of the European Commission. The report provides insight into the current state of blockchain technology, as well as its possible application and advocates for a future-orientated approach towards further exploration.
The JRC’s Director General, Vladimir Šucha, kicked off the event with a discussion of the transformation potential of blockchain and highlighted the importance of European leadership in the field. The report was then presented by its coordinator, Alexandre Pólvora, who outlined its key takeaways. These included blockchain’s vast potential relating to non-financial applications and other digital technologies, as well as the need for piloting and experimentation spaces.
Recent developments in the cryptocurrency industry have brought blockchain technology under increasing scrutiny. As such, we welcomed subsequent discussions from representatives of the Commission’s Directorate-Generals which cautioned against over-regulation. Peter Kerstens, from DG FISMA, stressed the need for technology-neutral regulation. Noting Europe’s tendency to focus on research over practical applications, Kerstens pointed to the US where the attitude is often to ‘innovate first and regulate later’. Advocating against overbearing regulatory frameworks, Pēteris Zilgalvis, Head of Digital Innovation and Blockchain at DG CONNECT, emphasised the importance of live testing in regulatory sandboxes for fostering blockchain innovation.
Emphasis was placed on securing Europe’s strategic autonomy and leadership in the blockchain field. According to Mark Nicklas from DG GROW, Europe must improve coordination of its action and pool its resources to compete in the leadership race. Several EU initiatives were referenced, including the EU Blockchain Observatory and Forum, the EU Blockchain Partnership, and a new Blockchain and AI fund which is being created. Although Europe remains behind the US and China on blockchain, it is well-positioned to become a leader alongside them if they take advantage of the opportunities before them.
Attention so far has been on the financial applications of blockchain, with most proof of concepts found in the finance sector. However, the technology’s decentralised nature makes it the ‘antithesis’ to traditional centralised financial services which, alongside switching costs, has resulted in its slow uptake in finance. Discussion turned to the non-financial sector uses of blockchain which have received comparatively little attention despite the myriad of benefits. Improved supply-chain interaction, traceability and intellectual property rights are just a few of the areas in which blockchain has the capacity to transform industries. It was suggested that the full potential of blockchain will be realised when combined with other digital technologies, such as AI and IoT.
The event ended with a panel discussion, “Scanning Blockchain Horizons”, which centred on blockchain use cases. In contrast with previous panels, Marcella Atzori, from the Italian Ministry of Economic Development, advocated for the development of common regulatory and legal standards for blockchain. Representatives from the UN World Food Programme and World Economic Forum asserted that more emphasis should be placed on the purpose of blockchain integration. It was suggested that discussions should not centre around the technology itself but rather focus first on business or societal needs, while positioning blockchain as a potential solution.
The release of the blockchain report comes as the new European Commission prepares to take office. The mission letters issued by President-elect Ursula von der Leyen to her Commissioners-designate, indicate that greater emphasis will be placed on blockchain technology under her presidency. Digital companies should take this opportunity to engage early on with policy makers in Brussels to ensure that favourable blockchain policies are developed over the coming five years to serve their business interests.
Author: Catherine Williams, Access Partnership