EU Commission Soft on Blockchain, Hard on Cryptocurrencies

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Blockchain and Virtual Currency Regulation in the EU

The European Commission (“EC”) has stated that the almost limitless list of potential use cases of distributed ledger technology (“DLT”) makes it both very promising and challenging, and has expressed its support for blockchain and DLT.[1]  However, many European institutions are still of the opinion that the technology is at its early stage of development, and it is therefore too early to regulate it.  They rightly see a risk that early regulation could limit its further development and potential.  Moreover, too early regulation could fail to regulate appropriately the relationships and reduce the risks associated with the use of blockchain technology.

The EC also indicates that it needs to “be able to make the distinction between a hype and a true opportunity to improve the lives of our citizens and businesses.  That’s why we [the EU] need to launch more proof of concepts and pilots in different domains and according to different use cases.”[2]  On this basis, the EU is currently exploring various applications of blockchain technology and its possible benefits both for public and private sectors.

As far as virtual currencies like bitcoin are concerned – which are based on blockchain technology – it seems that the EU has more concrete views.  Central banks of the EU Member States do not consider virtual currencies as equivalent to money, and they are not treated as legal tender…..

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Paul Gordon is the publisher and editor of iState.TV. He has published and edited newspapers, poetry magazines and online weekly magazines. He is the director of Social Cognito, an SEO/Web Marketing Company. You can reach Paul at pg@istate.tv