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The European Commission has launched a regulatory sandbox to explore the use of distributed ledger technology (DLT).
The Commission says the sandbox establishes “a pan-European framework” for collaboration between regulators, allowing them to hash out the legal ramifications for blockchain technologies.
While DLT, or blockchain, is set for fintech applications such as cryptoassets or reducing the cost of trading securities, the Commission says the tech has a “wider utility” beyond financial services, such as combating counterfeits and verifying credentials.
“While pilots have shown a significant potential of DLT across industry sectors, legal uncertainty prevails as governance remains shared between many actors,” the Commission says.
Increasing legal certainty is key, and it’s hoped “enhanced dialogue” between regulators and innovators will be encouraged through the “trusted environment” provided by the European Blockchain Regulatory Sandbox.
Regulators and supervisors will also have the opportunity to enhance their knowledge of blockchain technologies and share best practices, the Commission says.
Funded by the Digital Europe Programme, the sandbox will run from 2023 to 2026 and will support 20 projects a year.
The sandbox will be facilitated by a consortium under the leadership of Bird & Bird and its consulting arm Oxygy, supported by blockchain experts of WBNoDE and web-designers of Spindox.
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