What has happened?
The European Parliament has adopted a non-legislative resolution on distributed ledger technologies (DLTs) and blockchains.
What does this mean?
In the resolution, which was adopted last month, the Parliament emphasised that the EU has an opportunity to become "the global leader" in the field of DLT and to be a "credible actor" in shaping its development and markets globally.
The resolution discusses potential benefits of DLT/blockchain in a range of sectors, including financial services, healthcare, transport, supply chain, education, copyright and energy.
It also sets out some of the challenges facing the deployment of the technology and offers various recommendations.
While recognising that "the risks and problems of [DLT] technology are not yet completely known", the resolution lists some of the DLT-based applications that could affect sectors of the economy, including:
- transform and democratise energy markets by allowing households to produce and exchange environment-friendly energy;
- be used for mobility and logistics, including registration and administration of vehicles or smart insurance;
- improve data efficiency and the reporting of clinical trials in the health sector;
- improve supply chains, such as facilitating the forwarding and monitoring of origin of goods and ensuring consumer protection;
- be used for verifying academic qualifications, encrypted educational certification and credit transfer mechanisms;
- enable the tracking and management of intellectual property and facilitate copyright and patent protection, allowing greater ownership by artists through an open public ledger and bringing more transparency and traceability to the use of content;
- streamline the intermediation process and reducing transaction and hidden costs in the financial sector;
- reduce administrative burdens for citizens, businesses and public administrations in public sector services and management, for example in respect of public registries, land registry, licensing and migration management;
- enable users to gain a stronger control over what personal data they want to share, and can enhance personal data management.
In addition, the resolution makes various recommendations.
In particular, the Parliament:
- calls for the Commission and the financial authorities to monitor developing trends and use-cases in the financial sector;
- calls for the Commission and the European Data Protection Supervisor to provide guidance on how the GDPR applies to DLT;
- calls for the Commission to promote the development of technical standards with relevant international organisations (such as, ISO) in respect of smart contracts, and to conduct an in-depth analysis of the existing legal framework in Member States in relation to the enforceability of smart contracts;
- calling on the Commission to assess and develop a European legal framework to solve any jurisdictional problems that may arise in the event of fraudulent or criminal cases of DLT exchange;
- stressing that legal clarity is essential for unleashing the potential of initial coin offerings (ICOs) and preventing fraud and negative market signals;
- calls on the Commission to create an Observatory for the Monitoring of ICOs, as well as a database of their characteristics and taxonomy, distinguishing security and utility tokens;
- encourages the Commission and the national competent authorities to swiftly build up technical expertise and regulatory capacity, allowing for rapid legislative or regulatory action if and when appropriate;
- underlines that the EU should not regulate DLT per se, but should try to remove existing barriers to implementing blockchains, and calls on the Commission and the Member States to foster the convergence and harmonisation of regulatory approaches;
- calls on the Commission to raise awareness concerning DLTs, to undertake initiatives for the education of citizens regarding the technology, and to address the problem of the digital gap between member states;
- asks the Commission to undertake policy initiatives that promote the competitive position of the EU in the field of DLT.
What happens now?
The resolution will be considered by the European Commission.
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