After months of monitoring and observing the "promising and challenging" potential of distributed ledger technology (DLT), the Eu (EU) is finally making a turn into the blockchain industry.

How it all started

Dorsum in Feb 2022, the European Committee (EC) launched the European union Blockchain Observatory and Forum, aimed to support European cantankerous-border engagement with the technology and its multiple stakeholders and to unite the economy around blockchain.

Since its official launch, the newly established arrangement — supported past European Parliament — has released three thematic reports: the first one in July, dubbed "Blockchain Innovation in Europe"; the second one in October, "Blockchain and the GDPR"; and the third one in December, "Blockchain for Authorities and Public Services."

The 2d major stride was taken in Apr when 22 countries — 21 EU member states and Norway — signed a Declaration that created a European Blockchain Partnership (EBP). During 2022, 5 more than European countries joined the EBP: Greece and Romania in May, Denmark and Cyprus in June, and Italy — the last member to bring together — in September. The partnership's main focus is on cybersecurity, privacy, free energy efficiency and interoperability, all in total compliance with EU law.

As Mariya Gabriel, commissioner for the Digital Economy and Guild, underlined welcoming the established of the EBP:

Blockchain is a nifty opportunity for Europe and Member States to rethink their data systems, to promote user trust and the protection of personal data, to help create new concern opportunities and to establish new areas of leadership, benefiting citizens, public services and companies (sic)

European Blockchain Partnership

Back in the fall, ResearchAndMarkets.com published a new report dubbed "EU5 Blockchain Engineering Marketplace (2018-2023)." In the report, the Eu is expected to increase its investment into blockchain- and DLT-related projects from $94 million in 2022 to $386 million past 2022. The positive view within the document toward the blockchain manufacture in Europe is based on several crucial facts: The EC is liberalizing the industry'due south regulation and it creates a new task forcefulness entrusted with blockchain expertise.

Another move toward blockchain was fabricated in Oct this twelvemonth when the European Parliament formed a resolution titled "Distributed ledger technologies and blockchains: building trust with disintermediation." The resolution states that DLT "could potentially touch all sectors of the economy," but it focuses on several important spheres: finances, health care, transport, education, copyrights, public governance, information protection, and some others.

The agreement shows that the Parliament has set the plans for the EC to ensure that its proposed policies would be realized, taking into account benefits of the DLT implementations and warning near some of the related risks. This resolution is a crucial document, as it means that Parliament articulated several primary features.

Health care sector

The potential of DLT implementation in the health care and medical sector was among the first initiatives discussed past the European Union. My Health My Data (MHMD), the EU-funded project, has been aimed "to use blockchain applied science to enable medical data to be stored and transmitted safely and effectively." The resolution signed in October highlighted that blockchain would "improve data efficiency and the reporting of clinical trials in the health sector, allowing digital data exchange beyond public and private institutions nether the control of the citizens/patients."

Health care sector

For the EU, the main focus of the implementation of blockchain technology is on the protection of personal data (followed past the General Information Protection Regulation, known as GDPR), which gives "people more control over how they store, manage and utilize personal information generated online," says DECODE, another blockchain project funded past the European union. According to the document, blockchain "should protect the privacy of sensitive health data" and allow "citizens to control their health data and benefit from transparency thereon, and to choose which information to share, also with regard to their use past insurance companies and the wider health intendance ecosystem."

It likewise underlines the importance of improving the health care sector with DLT "through electronic wellness information interoperability, identity verification and a better distribution of medication," every bit well every bit improving the management of health intendance systems.

Financial services

There are several major advantages of DLT implementation for the financial sector inside Europe. One of them is, definitely, the significance of the blockchain technology in financial intermediation by "improving transparency and reducing transaction costs and subconscious costs by better managing data and streamlining processes."

Financial services

The EC and local regulatory regime are to monitor trends of DLT implementation in the finance manufacture and are encouraged to do "the research and experimentation that major financial institutions accept undertaken in the exploration of the capabilities of DLT."

The European Parliament also expressed its concern about the "volatility and uncertainty" of cryptocurrencies. It requires the EC and the European Cardinal Bank (ECB) "to provide feedback on the sources of volatility of cryptocurrencies, identify dangers for the public, and explore the possibilities of incorporating cryptocurrencies in the European payment system."

At that place are certain risks related to initial coin offerings (ICOs), and the resolution stresses the "lack of clarity with regard to the legal framework applicative to ICOs," that could negatively affect the investment and funding potential of ICOs. The Parliament asks the EC and national regulatory authorities "to identify criteria that heighten investor protection and articulate disclosure requirements and obligations for the initiators of ICOs" to avoid risks and dangers related to ICO projects.

The certainty and clarity of the crowdfunding in the crypto space could increase investor and consumer protection and reduce "the risks stemming from asymmetric information, fraudulent behaviour, illegal activities such as money laundering and revenue enhancement evasion."

How bright is the blockchain hereafter in Europe?

Meanwhile, the Distributed ledger technologies and blockchains resolution has more political significance than legal, as the EC is not required to practice anything in response to these requests.

Last calendar week, four major blockchain companies — including Ripple, the NEM Foundation, Emurgo (based on the Cardano blockchain) and "smart ledger" development firm Fetch.AI — formed "Blockchain for Europe" Association. It is aimed to help the Eu "shape the global agenda" on blockchain past providing education on the technology'south potential and by developing "smart regulation" of the blockchain industry.

The EC does not appear to be fully involved in promoting a global regulatory framework for the blockchain and cryptocurrency ecosystems. The general idea is to focus on promoting the regulations of the technology on national levels.

A vivid example of it is some other declaration signed on December iv between vii southern European countries — including French republic, Italy, Republic of cyprus, Portugal, Kingdom of spain, and Greece. It was reportedly initiated by Republic of malta, commonly known equally the "Blockchain Island" of Europe. This annunciation calls the Eu for assist to "promote DLT that is most associated with cryptocurrencies but is increasingly being used by governments to offering services to citizens."

Switzerland is another European country, simply not a member land, that has friendly regulation on the blockchain and crypto industries.

Europe has the ambitions to become "the global leader in the field of DLT," which can be seen from the number of initiatives taken place over the 2022 year. Nevertheless, it might want to consider bringing more legal power to them rather than just "raising the awareness."