- The European Commission has adopted a new Digital Finance Package to provide greater clarity for crypto-related companies.
- The commission and the European Blockchain Partnership will launch a blockchain-focused regulatory sandbox by 2022.
- The project aims to help regulators, companies and tech experts test innovative, blockchain solutions.
The European Commission will team up with the European Blockchain Partnership (EBP) to launch a new regulatory sandbox focused on cryptocurrencies and blockchain by 2022, according to an announcement published today.
The future of finance is digital.
— European Commission 🇪🇺 (@EU_Commission) September 24, 2020
The commission is the executive branch of the European Union and the initiative is part of its newly adopted Digital Finance Package that aims to provide greater clarity for cryptocurrency companies.
“By making rules safer and more digital friendly for consumers, the Commission aims to boost responsible innovation in the EU's financial sector, especially for highly innovative digital start-ups, while mitigating any potential risks related to investor protection, money laundering and cyber-crime,” the commission stated.
According to the commission, some digital assets already fall under EU legislation, however, these rules “most often predate the emergence of crypto-assets and DLT.” This could result in various roadblocks on the way of innovations and make it difficult to apply existing frameworks to blockchain and cryptocurrencies in the financial sector.
To remedy this, the commission and the EBP plan to launch a new Pan-European blockchain regulatory sandbox—a facility that would allow regulators, various companies and tech experts to cooperate and test innovative solutions in the blockchain sector without too much pressure from the authorities.
“The pilot regime represents a so-called ‘sandbox' approach – or controlled environment – which allows temporary derogations from existing rules so that regulators can gain experience on the use of distributed ledger technology in market infrastructures,” the commission noted.
The project will be focused on such use cases as data portability, business-to-business data spaces and smart contracts, as well as digital identity, environment, mobility, energy and other key sectors. The sandbox is expected to become operational in 2021–2022, the announcement added.
As Decrypt reported, the commission has spent the last year holding consultations with experts and defining digital assets to come up with a “historic” regulation for cryptocurrencies. With today’s adoption of the Digital Finance Package, the commission said it became one step closer to “paving the way for Europe to become a global standard-setter.”