(A.) Policy and Legislation
(A.1) Policy Objectives
Blockchain technology holds immense potential as a foundational infrastructure for trusted, decentralized, and disintermediated services across industries beyond finance. While FinTech pioneered early adoption through Bitcoin, blockchain's transformative power extends to sectors like healthcare, education, eGovernment, supply chain management, and IoT security. Key benefits include:
- Immutability & Transparency: Enhanced trust in financial services, regulatory compliance, and auditing.
- Decentralized Governance: Emergence of Decentralized Autonomous Organizations (DAOs).
- Cross-Sector Applications: Secure e-health records, intellectual property management, and sustainable supply chain traceability.
Challenges: Fragmented harmonization and interoperability hinder cross-border transactions. The EU Digital Single Market requires alignment with:
- GDPR, eIDAS, ePrivacy Directive, and AMLD regulations.
- MiCA Regulation (2023): Governs crypto-asset service providers and DLT-based markets.
- eIDAS2 (2024): Introduces electronic ledgers and EU Digital Identity Wallets.
- Data Act (2024): Mandates smart-contract standards for data sharing.
👉 Explore how blockchain enhances regulatory transparency
(A.2) EC Perspective and Progress Report
The European Commission (EC) advances blockchain through:
- Standardization Initiatives: Collaboration with ISO, ITU-T, ETSI, and CEN/CENELEC.
- Funding Programs: Horizon Europe, InvestEU, and Digital Europe Programme (supporting EBSI and regulatory sandboxes).
- R&D Projects: Blockstand and Seeblocks foster EU participation in global standard-setting.
(A.3) Key References
(B.) Requested Actions and Standardization Progress
(B.1) Priority Actions
- Governance & Interoperability: Address gaps in cross-sector DLT frameworks.
- Use Case Standardization: Focus on Smart Contracts, Digital Identity, and CBDCs.
- Regulatory Alignment: Ensure GDPR/eIDAS compliance in DLT implementations.
- Environmental Impact: Develop CO2 footprint metrics for blockchain systems.
👉 Learn about sustainable blockchain solutions
Action 7: ESOs to collaborate with ECB on Digital Euro interoperability standards.
(C.) Activities and Additional Insights
(C.1) Standardization Initiatives
| Organization | Focus Area |
|---|---|
| ISO/TC 307 | Smart contracts, security, NFTs |
| ETSI ISG PDL | Permissioned ledger architectures |
| W3C | Decentralized Identifiers (DIDs) |
| CEN/CLC JTC19 | EU-specific DLT standards |
(C.2) Collaborative Projects
- INATBA: Bridges regulators and industry for DLT adoption.
- EBSI: EU-wide infrastructure for verifiable credentials.
- Blockstand/Seeblocks: Strengthens EU’s role in global standardization.
FAQ Section
Q1: How does blockchain comply with GDPR?
A1: Through privacy-by-design techniques like zero-knowledge proofs and selective data disclosure.
Q2: What’s the role of smart contracts under the Data Act?
A2: They must meet essential requirements for data-sharing transparency and reversibility.
Q3: When will the Digital Euro launch?
A3: Pending ECB’s 2025 decision, with interoperability standards under development.
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