The European Parliament (EP) has proposed a resolution on how to deal with blockchain technology. Technology created. The resolution approaches the technology with a remarkable openness, while it clearly identifies related problems.
Anyone who has ever tried to find their way in the EU’s jungle of documents knows that it is not so it is easy to filter the meaning out of proposed resolutions. The document packs the actual statements into a jumble of statements about what has already been established and what it should say. I suppose if you are used to it it is relatively easy. If not, it gets pretty confusing. It is because of the incomprehensible situation with the documents that you can try yourself in the new area of the British bitcoin profit review.
“The European Parliament takes into account …”
So let’s try to find our way through. The resolution begins with this phrase:
“The European Parliament,
– having regard …”
which means “the European Parliament.” takes into account – that … “. Then there are nine points that list what the European Parliament is now considering. These include the questions of the European Commission on distributed ledger / blockchain technology, the proposed resolution of a committee, the adopted resolution on virtual currencies, fintech and geoblocking, the general data protection regulations of the EU and other preparatory work. That is the context of the resolution.
This is followed by fifteen statements about blockchain technology that begin with the word “whereas”, which literally means “whereas”, “while”, “although” or “meanwhile”. The following statements are mostly extremely positive. One could even say that the European Parliament is downright enthusiastic about the potential of the blockchain:
The blockchain can be a tool that empowers citizens to control their data. At the same time, it helps to ensure the integrity of data, thereby enabling forgery-proof audit chains and new models of public administration. The data stored on blockchains is more secure against cyber attacks. With these properties, blockchains can significantly improve various key sectors of the economy as well as the quality of public service.
A blockchain can increase the efficiency of transactions by eliminating middlemen and the costs they incur while maintaining transparency of transactions elevated. The users of a blockchain are pseudonymous, but not anonymous, which can help track down and fight corruption, tax evasion, money laundering and other illegal payments.
Sounds good, actually. After this enthusiastic preface, the actual resolution begins. It consists of 78 individual sentences, all of which I cannot possibly reproduce.They are divided into five sub-items: (1) applications, (2) ecosystem, (3) strategic importance for the public infrastructure, (4) the financing of small and medium-sized companies, and (5) the necessary policy for blockchain technologies promote. In the following I give excerpts from these points.
The ECB should check whether it can incorporate cryptocurrencies into the European payment system
The first part of the resolution assumes that the Blockchain technology “reduces the costs of middlemen between the partners in transactions and allows values to be exchanged peer-to-peer, which empowers citizens, disrupts traditional models, improves services and reduces costs across chains of values.” “Blockchain-based applications could exert a profound influence on the structure of public administration and the role of institutions.”
The areas in which parliament sees potential for the blockchain are largely known . You could call them the classics of largely unredeemed blockchain promises: energy markets, logistics, healthcare, supply chains, education, copyright, and finance. Extremely interesting is the section on finance, which is dedicated to the only blockchain application implemented so far – cryptocurrencies:
“[Parliament] recognizes the volatility and uncertainty surrounding cryptocurrencies; Notes that the feasibility of an alternative method of paying and transferring assets using cryptocurrencies should be further investigated; calls on the Commission and the ECB to provide feedback on the sources of volatility in cryptocurrencies, identify dangers to the public and examine the possibility of incorporating cryptocurrencies into European payments. “
{ {1}} Some media misinterpreted this sentence to the effect that the EU would like to integrate Bitcoin into European payment transactions. This is of course very far-fetched – but it does not diminish the importance of the fact that the European Parliament is considering making cryptocurrencies part of the payment system.
Blockchain gives users control over their personal data
The second part is devoted to the ecosystem. It is itself divided into several sub-chapters that address the various properties or features of blockchains: self-sovereignty, identity and trust, smart contracts, interoperability, standardization and scalability.
That is how the “emphasizes” Resolution, for example, that the blockchain “enables users to identify themselves, but at the same time retain control over which personal data they share.“Anyone who has already registered with an international crypto exchange or has only activated a prepaid phone card knows the problem that it is hardly possible today not to submit any photocopies of the identity card digitally in any way. Should a blockchain-based solution help here, this would be a huge step for data protection.
However, the resolution also sees various problems in bringing these applications into line with EU laws. For example, it is difficult to enforce the “right to be forgotten”. Also problematic are the high technical demands on users so that they can manage their data securely themselves.
With regard to smart contracts, the resolution primarily identifies legal uncertainties that show how far the way is to integrate such electronic, self-executing contracts into the existing legal system. As a first step, Parliament calls on the Commission to create legal certainty for the validity of cryptographic signatures. So you are still at the very beginning here. The commission should also promote the development of technical standards for blockchains and smart contracts.
It is also interesting here that the parliament calls for the commission to take steps to protect blockchains itself. For example, it should closely monitor the development of quantum computers, assess technical risks and support methods that strengthen resilience against cyber attacks.
A blockchain-based platform that makes government transactions transparent
Probably the most important aspect of blockchains for an authority like the EU is their importance for the development of public infrastructure. The technology has the potential to detoxify bureaucratic structures, especially with regard to the EU’s plans for eGovernment.
With the blockchain one can decentralize government activities and improve the possibilities of the citizens to their governments To take responsibility. According to Parliament, the Commission should examine how technology can improve traditional public services. It points in particular to the digitization of public registers, land registers, licenses, birth or marriage certificates and the management of migration.
At the same time, however, Parliament is aware of the associated risks. These arise primarily from free cryptocurrencies, such as their use for criminal activities, tax avoidance and money laundering. Parliament therefore insists that the Commission and member states observe and address these problems as quickly as possible.
The transparency of the blockchain represents a great opportunity for Parliament. It calls on the Commission to create a blockchain-based platform that enables the EU to monitor payments to non-governmental organizations in order to increase the visibility of EU funding programs to enhance. At this point I am still waiting for the EU to discover that something like this already exists with Bitcoin …
ICOs as an essential element of the Union of Capital Markets
Parliament admits the blockchain has great potential to improve the situation of small and medium-sized enterprises. “Open blockchain protocols can lower the hurdles for small and medium-sized companies and improve their competitiveness in digital markets.” What is relevant here is that blockchains reduce the costs of transactions and middlemen on the one hand, and ICOs on the other have an alternative instrument to raise capital.
Of course, Parliament emphasizes the dangers that come with ICOs, such as the large market for fraud and gray investments. But at the same time it explains that “ICOs can be an essential element of the Union of Capital Markets”. That’s a pretty big statement that gives reason to be optimistic that we will see a white ICO market in Europe in the years to come.
Education and retraining as the key to blockchain union
According to Parliament, the regulatory approach to blockchains should be “innovation-friendly, but enable identification, and it should be more technological through the principles of technology and entrepreneurial neutrality. “The Commission and the member states should develop and implement training programs for the necessary digital skills, and” develop retraining strategies that ensure that European society can actively participate in the paradigm shift. “
Blockchains as such should not be regulated in principle. Instead, the existing hurdles to implement blockchains should be removed. In addition to broad training for citizens, companies and the public service, research into and investment in technology should also be promoted.
The European Union, Parliament concludes, has an “excellent opportunity to become a global leader in the field of blockchain technology. “