European Union Makes Bid to Board Blockchain Bandwagon

(Bloomberg) -- The European Union is making a bid to board the blockchain bandwagon, with a new initiative that may explore broader uses of the technology beyond its original role in bitcoin markets.

A blockchain observatory and forum should "play an active role in helping Europe to seize new opportunities," the European Commission said Thursday in an emailed statement. Consensys, a developer of blockchain applications, will work with EU officials to gather information, analyze trends, bring experts together and find new uses for the technology.

Blockchain -- the technology used for independently verifying and recording transactions that’s at the heart of bitcoin -- can help make financial markets more efficient, quicker and more energy-efficient. Officials are also looking at ways the technologies can be used in other applications.

“Europe can be at the forefront of its development," EU Digital Commissioner Mariya Gabriel told reporters in Brussels. "We have been funding blockchain projects since 2013. The total support will soon reach 100 million euros ($124 million,)" she said, citing a digital health information project, My Health My Data, to encourage patients to share their data securely.

The EU push is one of several to try to ensure research projects across the soon-to-be 27-nation bloc coordinate their efforts. Gabriel said the region didn’t currently have enough developers working on blockchain. The European Central Bank has also been looking for ways to harness the new technology. President Mario Draghi said in May the central bank was closely watching blockchain innovation to ensure that its adoption around the euro area doesn’t fragment payment systems.

EU officials and politicians aren’t relentless cheerleaders for blockchain. Jakob von Weizsacker, a lawmaker at the European Parliament, warned of the risks of allowing one system dominate a technology. "Once you’re locked into one particular platform, that can imply enormous monopoly rents," he told reporters at the Brussels press conference.

EU Financial Services Commissioner Valdis Dombrovskis also warned of the need to be vigilant that cryptocurrencies "do not become tokens of unlawful behavior or the object of empty speculative bubbles,” he said in an emailed statement.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net.

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser, Ross Larsen

©2018 Bloomberg L.P.