Finance Ministers Meeting
At a recent gathering of European Union (EU) finance ministers in Vienna, it became clear that there is unlikely to be any move to regulate at the EU level in the near future. The meeting came roughly 10 years after the collapse of Lehman Brothers on September 15th, 2008, one of a series of events that arguably led to the rise of Bitcoin and suggestions for alternative, more transparent, economic systems.
The finance ministers have re-affirmed the EU’s desire to not rush any cryptocurrency regulation before a thorough analysis has been made. The agreement is the latest indicator that EU looks favorably on blockchain technology and is so far employing a very reasonable approach to regulations.
The EU has already launched several blockchain initiatives. Apart from investment into blockchain-related research, the commission set up the EU Blockchain Observatory and Forum. This body, led by veteran blockchain company Consensys, has the mission of monitoring blockchain initiatives in Europe, acting as a body of knowledge, and advising the EU on its potential role in Europe. As an example of this, the EU Blockchain Observatory is currently analyzing the impact of the recently-launched EU General Data Protection Regulation (GDPR) on the blockchain industry.
Other investments made by the EU in blockchain technology include the Horizon 2020 Prize “Blockchains for Social Good,” which offers a total of 5 million Euros for blockchain solutions aimed at solving social problems.
These investments, coupled with the finance ministers’ recent announcement, are encouraging for the blockchain industry. While the cautious approach to regulation is very sensible, there have also been calls by some industries to remove regulatory uncertainty. Many companies feel that the current hands-off policy leaves them stuck with outdated regulations and ambiguity about the legality and compliance of their business models.
Small Member States Lead the Way
In the absence of EU-wide policy decisions, some smaller EU member states have taken the matter into their own hands and have created crypto-friendly regulations in their jurisdictions, aimed at attracting blockchain companies. Gibraltar, Estonia, and Malta are examples of countries which have managed to create ecosystems ideal for blockchain companies. Contrary to popular belief, the regulations created by these countries are not particularly lenient or characterized by authorities turning a blind eye. Instead, they provide transparency, security, and up-to-date legal frameworks aimed at protecting consumers while also stimulating industry.
It remains to be seen if the EU maintains its hands-off approach, follows the examples set by its smaller member states, or eventually imposes more restrictive EU-wide regulations. For now, the blockchain industry can take comfort in the fact that the EU is actually trying to understand the technology and its potential before regulating it.