On October 3, 2018, the European Parliament adopted a non-legislative resolution entitled "distributed ledger technologies and blockchains: building trust with disintermediation." Of particular relevance to the financial services sector, the European Parliament is requesting that the European Commission and other EU authorities take various steps to maximize the potential of this technology in the EU, including asking:
- the European Commission and financial services authorities to monitor developing trends and use cases of DLT in the financial sector;
- the Commission and the European Central Bank to assess the sources of volatility of cryptocurrencies, identify any harm presented to the public and consider whether cryptocurrencies could be incorporated into the European payment system;
- the Commission and the European Data Protection Supervisor to provide further guidance on how DLT can comply with the EU legislation on data protection, and in particular, the General Data Protection Regulation;
- the Commission to work with international organizations to enhance the development of technical standards for smart contracts and to undertake an in-depth analysis of the existing legal framework in all member states on the enforceability of smart contracts;
- the Commission to assess whether any potential barriers to use of smart contracts are proportionate, noting that legal certainty could be enhanced through coordination and mutual recognition between member states;
- the Commission to analyze whether a European passport for DLT-based projects could be introduced to enhance legal certainty for investors, users and individuals and promote financing to small- and medium-sized enterprises;
- the Commission to develop guidelines, standards and disclosure requirements for Initial Coin Offerings, including identifying the criteria for improving investor protection;
- the Commission to consider the legal requirements that would allow ICOs to be used to boost funding for SME's; and
- the Commission to create an Observatory for Monitoring of ICOs and a database of their characteristics and taxonomy with a view to developing a model framework for regulatory sandboxes, including standards and a code of conduct.
The provisional text of the resolution is available at: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+TA+P8-TA-2018-0373+0+DOC+PDF+V0//EN.
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