The European Union will provide funding 340 million euro for the development of the blockchain technology between 2018-2020. The European objective is to develop a common and unitary business approach to blockchain technology. Currently, in Romania, less than 0.8% of blockchain projects at European level are running through the 65 blockchain projects under development, while at European level there are over 8,200 active projects.
EU intensive actions to support Blockchain
The European Commission encourages this new paradigm and aims to create an environment that will develop these new business models and aims to develop a common and unitary approach to Blockchain for the EU at international level.
The latest initiative in this regard is the creation of the Blockchain Observatory and Forum, which will monitor the evolution of blockchain technology and act as a hub to promote European actors and strengthen European engagement with more stakeholders involved in these activities. The European Commission recognizes and encourages the innovative potential of this technology. As early as May 2017, in the Digital Single Market report, the Commission recognized technology based on blockchain technology as having tremendous potential for our administrations, businesses and our society in general, and has accelerated Horizon 2020 funding programs to this end.
So far, the EU has allocated 83 million euro to fund blockchain projects. The objective of the European Commission is to explore the potential of the blockchain to improve cross-border European services (VAT reporting, taxation, environmental and financial reporting, customs, medical records management, clinical trial reporting, drug registration, identity management, etc.)
This increase in blockchain-based usage shows an interesting perspective on the future, confirming that Europe may soon be witnessing the emergence of a new generation of digital services in which we are confident that Romania can also play an important role.
Innovation through blockchain
Blockchain is currently the most disruptive distributed technology, used to conduct secure, decentralized transactions. Although this technology has been introduced with bitcoin and is frequently associated with virtual coins, it is now widely adopted by all industry sectors and enjoys a fulminating popularization. Many EU Member States have launched initiatives to this end, and large IT giants already offer Blockchain solutions to customers. Here are just a few examples: IBM is developing a blockchain-based payment system, Amazon plans to include a blockchain in the AWS suite of applications, and Microsoft already offers “Blockchain as a Service” on their cloud platform Azure.
Blockchain gets bigger and changes the rules of the game
Until now, the venture capital industry has invested about 1.2 billion euro in the blockchain in more than 1,100 companies, of which 300 are European. In addition, bodies of strategic interest at the global and European level are providing increasingly significant funding in this technology. A study at Cambridge University shows that the most important area remains to banking and financial – for money transfers mainly, but there is also significant growth in the governmental area – for citizens’ identity management, tax reporting, development aid management, vote electronic and regulatory compliance, in the field of insurance – for contract automation and healthcare – to track transactions on patient health records and identify access.
Blockchain can bring major improvements for European industry – from start-ups to large corporations, governments and citizens. In addition to optimizing business processes at the governmental and organizational level, another effect that will change the rules of the game will be the emergence of new distributed business models and interaction based on peer-to-peer direct exchanges without the need for centralized platforms or intermediaries.
How does Romania face the blockchain challenges?
Romania currently operates less than 1% of blockchain projects at European level. In our country, there are 65 developing blockchains, while at European level there are over 8,200 active blockchain projects, and in the United States, the number exceeds 9,565, according to the Atomico – State of European Tech report in 2017.
Even though some entrepreneurs have noticed the huge potential for innovation and fundraising, there is no initiative at the government level, although the impact would be major. From this point of view, it would be a huge chance to align ourselves with the trends of the EU and the developed countries. There is a great potential that by adopting blockchain technologies we can overcome the shortcomings of centralized power structures and the lack of existing infrastructure and bureaucracy at this time. Blockchain technology would reduce risk and fraud by facilitating much better control over monetary policy and taxation.
In 2016, nearly 2,000 block-break start-ups have emerged in developed countries, with special remarks in Singapore, Dubai, and London, where regulators encourage innovation and compete for world financial supremacy. In Romania, the Start-up Nation program has funded several blockchain initiatives, with growing interest from entrepreneurs. State-level decision-making bodies should tune in with the European directives in this direction and initiate at the level of administrations the adoption of blockchain technology to be an active part of the consolidation at EU level.