Today, the European Commission's Joint Research Centre published a flagship report exploring the challenges and impacts of blockchain and distributed ledger technologies. The report offers an in-depth and practical understanding of blockchain, moving beyond the hype surrounding blockchain, and addresses how the technology can be used in finance, industry, trade and other areas of policy. The report also identifies ongoing and upcoming transformations in a range of sectors relating to distributed ledger technology and sets out an anticipatory approach for further exploration. This research is part of the EU's ongoing interest in blockchain and fintech, starting with the Commission's horizontal task force on fintech, and the founding of the Blockchain Observatory and Forum.
Most notably, the report emphasises that distributed ledger technology has the potential to transform the way that we transfer assets, including legal contracts, data and services, but that existing policies and laws need to be reviewed to ensure they are fit for purpose. In particular, the report highlights the importance for consumer and data protection.
Although the report does not specifically mention competition law, such laws and policy frequently overlap consumer and data protection issues. This has been highlighted recently by Commissioner Vestager, the Commissioner-designate for Competition, who has also been appointed as Vice-President designate for Europe fit for the Digital Age (Digital EVP). As Digital EVP, Commissioner Vestager will coordinate the work of the Commissioner-designate for Internal Market, Sylvie Goulard, including on blockchain, high-performance computing, algorithms, and data-sharing and data-usage tools, jointly defining standards for 5G networks and new-generation technologies.
Such a policy mandate may also overlap with Commissioner Vestager's role as Commission-designate for Competition. In particular, for example, since Commissioner Vestager has taken action against multiple tech giants in recent years as previous Commissioner for Competition, and given blockchain and distributed ledger policy is likely to be a part of the role of Digital EVP, there may be some overlap in the European policy relating to the regulation of Facebook's cryptocurrency Libra. Indeed, this comes at the time where France and Germany have agreed to block Libra in Europe due to concerns around sovereignty and financial security.
It is safe to assume that the European Commission is becoming more involved in blockchain and distributed ledger technology policy, and such involvement is likely to spill over into competition law and policy, in addition to consumer and monetary policy.
Policymakers and regulators need to progress in assessing whether existing policies and laws are fit for purpose or if new frameworks will be required.