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Lawmakers said Wednesday that the pilot legislation would put the bloc at the 'front of the curve.'
People in the European Union will try out blockchain technology for stock and bond issuance, trading, and settlement. The European Parliament in Brussels approved a five-year pilot project that will start in 2018.
Lawmakers said Wednesday that the pilot legislation would put the bloc at the "front of the curve."
The European Commission came up with the idea for the first time. It will give people in the EU a chance to try out new crypto applications that aren't allowed by existing laws about how money works in the world.
Parliament member Johan Van Overtveldt, who worked on a deal between the European Union and the governments of each country, said that it's important to make existing financial laws work better with digital technology, but also to show that you're willing to try new things that could make the financial markets safer and more efficient.
That's not all: Van Overtveldt, who used to be Belgium's finance minister, said that crypto experiments that worked on a small scale might not work as well when they move to the next level.
"What works in a small test environment doesn't always work in a bigger one," he said, adding that lawmakers in the future would need to "thoroughly check out the exemptions" before "upscaling."
Ms. Mairead McGuinness, the European Commission's most senior financial-services official, praised what she said was "groundbreaking work" that could allow financial markets to "safely experiment" with new technology more quickly by allowing traditional financial instruments like stocks, bonds, and ETFs to be tokenized in spite of EU law.
The plans, which now look like they're going to be law, are from a legislative body that is also considering ending online anonymity and limiting proof-of-work assets like Bitcoin because they're thought to be bad for the environment.
In the eyes of some lawmakers, the pilot goes too far. They say it's a loophole in laws about financial trading and infrastructure that were meant to protect investors and keep the economy stable.
It's not a good idea to vote against the pilot project law, says Ireland's Chris MacManus, a member of Parliament's far-left political group. Instead, his vote is against "irresponsibility and industry lobbying that could lead to a pilot project spiraling into what would be effectively an exercise in deregulation," which is why he voted for it.
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