Blockchain transactions are recorded by multiple users, rather than by paid – and often costly – intermediaries. The model is currently best known for underpinning the functioning of digital currencies, such as Bitcoin.
The Industry Committee at the European Parliament approved on Wednesday recommendations on how to apply the blockchain model elsewhere, so as to cut intermediation costs for small firms, empower citizens and enable the EU to become a global leader in this field.
It is not all about Bitcoin
Citizens could use blockchains to gain full control of their own data and decide what to share, and small firms and innovative start-ups could use them to cut intermediation costs and ensure that transactions are executed efficiently, the approved text says.
MEPs advocate applying the blockchain model to areas such as energy consumption, health care, supply chains, transport, finance and the creative industries.
For example, the model could help to:
- monitor the origin of goods, offering greater certainty that, e.g., diamonds are ethically sourced, clothes are not made in sweatshops and a bottle of champagne comes from Champagne,
- “democratize” the energy market, by enabling households that produce energy to exchange and consume it without the need to pay an intermediary agency, and
- create records such as land registries, birth certificates and business licences with less dependence upon lawyers, notaries and government officials.
Industry Committee MEPs call on the EU Commission to propose a regulatory approach designed to promote different uses of blockchains and other Distributed ledger technologies (DLTs) that is innovation-friendly and technology neutral.
To ensure the sector is competitive, MEPs also ask for the post-2020 EU long-term budget (Multiannual Financial Framework – MFF, currently under negotiation) to include funding for blockchain-based research and projects.
Rapporteur Eva Kaili (S&D, EL) said: "Today the Industry Committee voted univocally in favour of a forward-looking technology that we expect to change the quality of our life, empower SMEs and improve business models in most industrial sectors. Blockchain is a cutting-edge technology and we aspire to make EU the global leader in the era of the Fourth Industrial Revolution".
The non-binding resolution was approved by 52 votes to 1, with 6 abstentions. The Industry Committee also approved an oral question to the Commission to be debated during June plenary.
Blockchain-based transactions create fast, cheap and secure public records and can be also used for many non-financial tasks, such as casting votes in elections or proving that a document existed at a specific time. Blockchains are particularly well suited to situations where it is necessary to know ownership histories.
They also present opportunities in all kinds of public services such as health and welfare payments and, at the frontier of blockchain development, are self-executing contracts paving the way for companies that run themselves without human intervention.
Parliament study: “How blockchain technology could change our lives”