The European Commission announced the decision to launch of a new blockchain association in 2019, called International Association for Trusted Blockchain Applications (IATBA). There are several goals the EU Commission would like to reach with the establishment of a new entity. These goals are to be structured in “a trusted, secure and resilient European Blockchain Services Infrastructure meeting the highest standards in terms of privacy, cybersecurity, interoperability, and energy efficiency, and fully compliant with EU law.” It is to develop guidelines and protocols for the blockchain industry and promote the EU’s blockchain standards internationally. Another task of new organization is to provide information for the implementation of Europe’s blockchain strategy.
The background of the initiative
The idea was presented at a recent EU roundtable event called “Bringing industries together for Europe to lead in blockchain technologies”, where the upcoming launch of the IATBA was formalized. The new developments will be coordinated between the EU’s executive body, the European Commission, and the European Blockchain Partnership. The launch of the latter took place in April of this year, with 27 countries from Europe aboard at that time. Since then, 5 more countries joined the EBP.
“It is good news that the blockchain gains so much attention on the highest level. However, there are lots of associations established already. Such entities sometimes take decisions which can be controversial. Take GDPR, for example. This law protects citizens, but it made some companies transform a lot, sometimes not in a positive way at all. So we need to observe the first steps of this new association, the results of its activity, in order to conclude something,” says Dmitry PLAKHOV, the head of blockchain laboratory at R&D department of Digital Technologies.
Pros and contras of banks to be the driving force of the initiative
According to the European Commission statement, the public sector plays a significant role in the blockchain, thus the uptake of this new technology requires close cooperation between the public and private sectors. Governments and economic actors must work together to overcome regulatory obstacles, increase legal predictability, lead international standardization efforts and accelerate research and innovation to support scalability of innovations. Thus, the newly developed frameworks are to ensure that Europeans benefit and that Europe is to establish itself as a hub for blockchain technologies.
It became known that the major banks are already involved into a process. The Spanish banking giant BBVA announced that it and four other banks had joined the initiative. Carlos KUCHKOVSKY, BBVA’s head of R&D for new digital business, stressed the importance of the role of new entity in “establishing blockchain best practice and standards and at avoiding fragmentation on a European level.” He also expressed his view that the EC initiative will provide more clarity to the “regulatory uncertainty” surrounding the blockchain.
Indeed, the blockchain has been too long “regulatory neglected” by the EU, so finally addressing this enormous technological development is about time. It is a good sign that the EU is seeking for external advice and support for arriving at guidelines, even setting “best practices” was mentioned as a possible outcome, and that is positive, says Drs Hans KONING, CEO and Governance visionary of Vicarium — however, in his opinion, it is not the best choice to let the banking sector take a leading role in that process: “Whenever a policy is developed for a new and uncharted industry, it is not good to have established players in a related — if not competing industry — at the table. The banking sector, in general, has not been favourable towards blockchain technology, and have been outright hostile to cryptocurrencies. New digital business is crucial for economic development, and inviting a protectionist view is simply not a good idea. Apart from that — and even more important — the blockchain represents a decentralized society and economy, and a tokenized economy is an expression of that. I am skeptical that banks have seen the light of decentralization. Having them as a voice of many is not an issue, having them front and center stage is problematic.”
Is there any reason for creating new entities?
During the last several years, dozens of countries came up with blockchain association initiatives. As by now, there are almost 400 of them to counter. But is the performance of these entities somehow productive? The establishment and existence of most of them is questionable, with no obvious and estimated results, just like the majority of crypto projects and ICOs established during the last couple of years. The role of these associations is of no significance or effectiveness, which bring us to a rhetorical question — why were they estimated at all?
Of course, the market should always welcome any initiative that supports blockchain awareness, but it is also necessary to measure the performance and the impact it can have on the developing industry. Olinga TAEED, Visiting Professor in Blockchain at Birmingham City University, expresses his concern about the initiatives in the blockchain industry: “Now each country has its own variety. In the UK we have seen the British Blockchain Council, British Blockchain Association (BBA), British Blockchain Advisory Council (BBAC), Blockchain Advisory Council (BAC), etc. You can repeat that for every country. Internationally there is the Global Blockchain Business Council (GBBC), and the newly formed Global Blockchain Consensus Alliance, the World Blockchain Alliance. IATBA is a good initiative also. But will it set a standard as they claim? No.”
There is great sense in Mr. Taeed’s words. The studies and developments wouldn’t be performed by IATBA only — as we understand, currently, there are so many associations of different level working on regulations. The actions by these numerous entities will probably be discordant, and thus, create contradictory environment. Meanwhile, it is quite understandable, that the EU officials need to make sure the markets realize that the authorities are aware of the new technologies, and are working on it. This may be one of the main reasons behind the establishment of IATBA. The new association is to be launched in early 2019, the agenda and the first steps will send signal to the blockchain industry what to get in the nearest future, and how to channel the work of numerous associations to be more coherent.