European Parliament Passes A Resolution for DLT and Blockchains

On May 16^th, The European Parliament Committee on Research, Industry and Energy, passed a blockchain resolution, and included a section on initial coin offerings (ICOs). The resolution garnered the support of 52 members, with 1 against and 6 abstentions. 56 were in favor of cryptocurrencies while 3 voted against. Everybody was in favour of ICOs while a proposal for an observatory body was adopted by everybody.

Greek S&D member, Eva Kaili, proposed the resolution that aims to recognize the role that blockchain can play in enhancing innovation in Europe and around the world. In it she calls for “open-minded, progressive and innovation-friendly regulation”.

During the deliberations, Kaili said that it was an important moment because this was the first time a big institution such as a Parliament was discussing the regulatory framework requirements for distributed ledger technologies and blockchain. The legislator argued that blockchains were capable of building a system architecture that would be able to improve on existing business models and design a new value-chain.

She explained that the main goal of the resolution was to highlight that distributed ledger technologies (DLTs) were not confined to blockchain and Bitcoin alone. She suggested that the use of DLTs should be explored in several crucial sectors such as artificial intelligence (AI), FinTech, healthcare and the energy sector. She also suggested exploring its uses in the government sector.

The EU has an important role to play in cultivating this technology, said Kaili.  “We aspire to make EU the leading player in the field of blockchain," she said. "We experience a strong entrepreneurial interest in blockchain. We, as regulators, need to make sure that all this effort will be embraced by the necessary institutional and legal certainty."

A concern that arises is the impact the technology could have on people and their data, whereby Kaili said that as technology evolves, the risks do too. She explained that “it is not smart to regulate the technology per se, but rather its uses and the sectors that adopt this technology in their business models. Consumer protection and investor protection come first.”

Another notable blockchain enthusiast in the parliament is Henna Virkkunen, who expressed her gratitude for the resolution on her Twitter account, calling it a positive step. The legislator had previously argued that DLT was still evolving and she agreed that the Parliament’s approach should be technology-neutral. She has also asked for Europe to become as innovation- friendly as possible, while still being aware of the risks. Virkkunen explained the benefits of Initial Coin Offerings (ICOs):

“Initial Coin Offerings (ICOs) have a strong potential in funding innovation and accelerate technology transfer; ICOs are a distinct asset class with strong potential; Calls on the Commission to propose a framework for ICOs.”