Blockchain and Distributed Ledger Technologies: An EU Policy Perspective
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The document discusses the EU's policy perspective on blockchain and distributed ledger technologies, highlighting its importance for the digital single market and financial sector. It outlines strategic initiatives, regulatory frameworks, and potential applications of blockchain, emphasizing the need for innovation, security, and interoperability. Key areas covered include the role of various European supervisory authorities, the establishment of task forces, and proposed EU initiatives for knowledge sharing and technology standardization.
Blockchain and Distributed Ledger Technologies: An EU Policy Perspective
- 1. Blockchain and Distributed Ledger Technologies: An EU Policy Perspective ITU Workshop on "Security aspects of blockchain" 21 March 2017 Benoit Abeloos, EC, DG CNECT, Startups and Innovation Unit, benoit.abeloos@ec.europa.eu
- 2. Agenda • Digital Single Market - ICT Standards priorities • Blockchain and financial markets • European Parliament contributions • The FinTech Task Force • Application areas for blockchain • EU initiatives
- 3. Report on Single Market Integration and Competitiveness in the EU and its Member States Context: a deeper and fairer Single Market Single Market Strategy Trade for All Communication Capital Markets Union Digital Single Market Energy Union EFSI Consumers Innovation Delivery
- 4. … Delivering on the DSM Strategy '19 April 2016 Package' first industry-related package under the DSM Market strategy set of coherent policy measures aiming at the digital transformations of our industries and at maximising their impact on economic growth
- 5. 1ST PILLAR: PRIORITY SETTING • Key building blocks for DSM identified: 5G, cloud computing, IoT, (big) data, cyber-security • Will benefit application areas (eHealth, smart energy and cities, ITS / connected & automated ve- hicles, advanced manufacturing, …) • For each: clear deliverable with deadline and who does what clear set of detailed priorities & list of tasks Involvement of ESO, SDOs & MSP is key! 5
- 6. Blockchain: where did it start? • With virtual currencies and their disruptive potential on financial markets • Bitcoin was introduced on 31 October 2008 by Satoshi Nakamoto, never identified • Released as open sources software, based on distributed ledger technology • Many other virtual currencies launched since then • Total market cap in billion€
- 7. Virtual Currencies, a growing market cap
- 8. European Parliament resolution of 26 May 2016 on virtual currencies • Opportunities and risks of VCs and DLT in the rapidly evolving technological landscape of payments • Potential impact on monetary policy, VCs' volatility • Employing DLT beyond payment • Clearing, settlement and other post-trade management processes, bank reconciliation… • And beyond the financial sector… • Encourages government agencies to test DLT systems • Smart regulation towards fostering innovation and safeguarding integrity: • Proportionate regulatory approach at EU level – Not to stifle innovation • Calls for the creation of a horizontal Task Force DLT
- 9. EU Parliament draft report on the influence of technology on the future of the financial sector • Which technologies? DLT, Artificial Intelligence, and Cloud • Drawing an EU framework for FinTech • Draw up a Fintech action plan • Legislation in the financial domain should be proportionate and according to • The innovation principle • Same service and risk, same rule. • Technological neutrality • Recommends controlled experimentation by authorities • RegTech potential to alleviate compliance processes
- 10. European Supervisory Authorities • European Central Bank • Adopting existing standards • European Bank Authority • Prudential regulation and supervision across the European banking sector • To perform these tasks, the EBA can produce a number of regulatory and non regulatory documents including binding Technical Standards, Guidelines, Recommendations, Opinions and ad-hoc or regular reports • European Securities and Market Authority (ESMA) • is issuing guidelines and technical standards which should be followed by the industry • European Insurance and Occupational Pensions Authority • developing technical standards to implement different legislations related to the insurance sector
- 11. EP draft report (2) • Cyber security and ICT risks • Need for end-to-end security across the whole financial services • ESAs to regularly review operational standards • Need for information sharing between ESAs and market participants • Concerns about unlawful use of blockchain, for example through bitcoins • Need for better education and awareness for citizens and businesses
- 12. FinTech task Force • Work Stream on blockchain • Creation of a blockchain observatory (beyond FS) • Work Stream on interoperability and standards • FinTech included in the ICT standards rolling plan • Need for a cartography of FinTech standards • Need for cooperation between stakeholders • SDOs (ISO TC68, ISO TC307, ITU, ETSI,…) • European Supervisory Authorities (EBA, ESMA, EIOPA) • Banks, Insurances • New players (payment, RegTech, lending, financing, etc…) • Need for coordinating EU initiatives • Launch of a public consultation • https://ec.europa.eu/digital-single-market/en/blog/european-commission- sets-internal-task-force-financial-technology
- 13. Potential applications of Blockchain Blockchain F i n T e c h e H e a l t h e G o v I P R , c o p y r i g h t E n e r g y ?
- 14. EU initiatives: blockchain observatory • Launch of a hub to access, share and disseminate knowledge on BC/DLT, with objectives to • Mapping existing initiatives (PoC), knowledge sharing • Monitor development around BC/DLT • Develop expertise • Community building • Address sectoral and cross cutting issues (governance, scalability, compliance, interoperability…) • Inputs / recommendations for EU policies / actions
- 15. EU initiative: interoperability and standards • Included in the ICT standardisation rolling plan • https://ec.europa.eu/digital-single-market/en/rolling-plan-ict- standardisation • Develop cartography of FinTech • Launch a specific study on blockchain standardisation • Organise cooperation workshop between standardisation stakeholders • Identify priority use cases for piloting • Financial Data Standards project
- 16. EU initiatives: technology watch and analysis • Studies and analysis • DLT and cybersecurity https://www.enisa.europa.eu/publications/blockchain-security • Virtual currencies https://ec.europa.eu/jrc/en/publication/overview-and-analysis- concept-and-applications-virtual-currenciesJRC http://publications.jrc.ec.europa.eu/repository/bitstream/JRC97 043/the digital agenda of virtual currencies_final.pdf • DLT and securities market https://www.esma.europa.eu/press-news/esma-news/esma- assesses-dlt%E2%80%99s-potential-and-interactions-eu-rules
- 17. EU Initiatives: piloting, research and innovation • Pilot a DLT-based European Financial Transparency Gateway • H2020 Research and Innovation Projects: • Decode – distributed and privacy-aware architecture for decentralised data governance and federated identities • My Health My Data – eHealth, eHR