Unlocking the full potential of blockchain

Banking & Finance
| The European | 7th August 2019
Save

Blockchain is a truly transformative technology with the potential to have a profound impact on how we use the internet and make our online lives safer and simpler.

The decentralised nature of distributed ledger technology (DLT) provides us with new ways to interact with each other, exchange vast amounts of data and carry out transactions, such as the registration of land or the transfer of funds in a much safer, cost-effective and almost real-time environment.

At the centre of this disruptive innovation stands the need to create an internet of value that overcomes the trust gap among internet users. In this respect, blockchain technologies enable us to meet the original objectives of the internet: as early as 1983, the vision of ARPANET, the predecessor of the internet, was to create an open, trusted and decentralised network to empower people to collaborate with each other, exchange knowledge and carry out transactions. 

A key difference between the early days of the internet and today is the sheer size and complexity of the network, with large transactions and data exchanges being realised in a matter of seconds at a global scale. Hence the need for a step change in the level of trust within the system.

Blockchain can help bring about that change. It can be a powerful catalyst for improving the effectiveness, openness and responsiveness of public institutions, empowering citizens to take back control of their own data, while fostering the rapid growth of businesses.

However, important challenges remain if we are to unleash the full potential of blockchain technologies: 

    • How can the access and use of blockchain technologies be democratised, empowering and serving citizens, policy makers, industry leaders and SMEs? 
    • How can the confidence and legal predictability be augmented in relation to the development and use of blockchain applications?
    • How can good governance practices be fostered, ensuring integrity and transparency in the use of blockchain technologies?    
    • How do we move from proofs of concept to scaling up the use of blockchain technologies across multiple sectors both in public and private institutions?

The technology itself is not a silver bullet. Blockchain needs to be shaped and adapted to the real needs of citizens, companies and society in order to make a real impact and contribution towards economic and social development. To unlock the full transformational potential of blockchain, we need a global governance framework for blockchain, covering both public and private sectors, to ensure the integrity and transparency of the technology as it spreads. Such a framework must be inclusive, involving policy makers, regulators, industry leaders, startups, SMEs, civil society and standard setting bodies.

The latest step towards the development of such a framework came on 3 April 2019 with the launch of the International Association for Trusted Blockchain Applications (INATBA) bringing together an initial global community of 105 founding members from all sectors representing industry, startups, SMEs, public institutions and civil society. The new initiative is also supported by key international organisations such as the World Bank, the OECD, the UNWFP, UNFCCC, UNICEF, the WTO, the EBRD, and the EIB.

One the key aims of INATBA is to provide a framework for dialogue between public authorities, regulators and private sector stakeholders at a global level. This is seen as the most effective way of encouraging regulatory convergence on a global scale and developing sector-specific guidelines for development and adoption of trusted blockchain and DLT applications in specific sectors.

We are convinced that INATBA will contribute to unleashing blockchain’s full potential by bringing these different stakeholders together around a common objective: to establish a strong regulatory framework and a set of shared international standards. We in the European Commission are ready to collaborate closely with INATBA and its members to help them achieve these ambitious goals.

We will look at how the EU approach to blockchain can be useful in this regard. Europe’s leadership in the development and uptake of this new technology requires close cooperation between the public and private sectors. Multiple stakeholders – including governments, industry, financial institutions, startups, and civil society – have to work together to overcome regulatory obstacles, increase legal predictability, lead international standardisation efforts and accelerate research and innovation to support scalability of innovative blockchain technologies.

Based on this need for action, in 2018 we set up the European Blockchain Partnership – an initiative supported by the European Commission and 29 national governments, working together to develop the European Blockchain Services Infrastructure (EBSI). The EBSI will support the delivery of cross-border digital services of public interest with the highest standards of security and privacy protection. It will work across diverse areas, such as tax registries, validation of diplomas and education certificates, authentication and verification of documents for audit of EU-funded projects.

We also created the EU Blockchain Observatory and Forum which will map key blockchain initiatives and carry out analytical work on a broad range of important themes, focused on the further development and adoption of blockchain technologies. 

The EU vision for blockchain technology development can be summarised as follows:

  • Joined up political vision (EU-MS) – Joint declaration on the establishment of the European Blockchain Partnership (EBP) and the development of the European Blockchain Services Infrastructure (EBS) for cross-border digital services of public interest.
  • Public-private partnerships – Supporting the creation of The International Association of Trusted Blockchain Applications (INATBA).
  • Connecting global expertise –The EU Blockchain Observatory and Forum brings together the leading global experts to identify obstacles, incentives and practical solutions to promote blockchain uptake.
  • Investing in EU innovation and startups –Through the connecting Europe facility and H2020 programmes, the EU is co-investing in the most advanced new EU investment scheme for AI and Blockchain and Support programme.
  • Promoting an enabling DSM legal framework interoperable standards and skills development.

It may be premature to think of blockchain going mainstream, but the foundations have undoubtedly been set this year for that to happen sooner rather
than later.

Further information

The EU Blockchain Actions Factsheet can be found at ec.europa.eu

Sign Up

For the latest news

Read On The Go

Subscribe

Get the digital edition of the Award Winning The European

subscribe for free

Download the App free today

Follow your favourite business magazine while on the go. Available on

Hard Copy

Magazine

Get your favourite magazine delivered directly to your door

£49.95 4 issues

Other Banking & Finance Articles You May Like

Website Design Canterbury

Magazine

Hard Copy

GET YOUR FAVOURITE MAGAZINE DELIVERED DIRECTLY TO YOUR DOOR



Annual Magazine Subscription (4 Issues)
Shipping Options



Subscribe

Read On The Go

GET THE DIGITAL EDITION OF THE AWARD WINNING THE EUROPEAN