The European Blockchain Sandbox has announced its first cohort of 20 projects exploring the use of blockchain technology in the region.
The selected projects will receive regulatory and compliance guidance from a cross-section of European Union regulators based on their industries. The projects cut across several sectors, with transportation, culture, food, education, manufacturing, finance, and telecommunications making the bulk of use cases.
The use cases are evenly distributed across the region, with Western Europe housing 14 projects while central Europe and the Nordics have eight use cases. Eastern Europe and Southern Europe have ten and seven projects, respectively, following a stringent selection process.
Over 90 firms took an interest in participating in the Sandbox, but only 20 projects were chosen to join the inaugural cohort. Firms that met the selection criteria but failed to make the final cut “have the possibility of being waitlisted” and will be allowed to apply to future cohorts.
The European Blockchain Sandbox will run three cohorts, supporting 20 initiatives in every iteration, with the second and third scheduled for 2024 and 2025, respectively. Successful use cases will be paired with regulators to begin “confidential dialogues” on operating within the confines of existing regulations.
“The sandbox will allow supervisors to enhance their knowledge of cutting-edge technologies involving DLT (distributed ledger technology),” read the report. “Lessons learned will be shared between participating regulators, helping the European Commission to identify best practices.”
The Sandbox will share its progress with the EU Digital Finance Platform and the Artificial Intelligence (AI) sandbox under incoming legislation. Experts note that the collaboration will play a significant role in the face of the “increasing convergence of innovative technologies” in use cases.
At the end of each year, a prize will be conferred on the regulator deemed the most innovative under the stewardship of law firm Bird & Bird.
Blockchain in the EU
Since its debut in 2009, blockchain adoption in the EU ranks as the highest, with use cases spanning multiple sectors. Administrators in the region are also leveraging the technology to improve processes, with the region leaning on blockchain for a retail central bank digital currency (CBDC).
Banks in the EU are also tinkering with the possibility of using blockchain for interbank settlements via deposit tokens and other digital assets.
Acutely aware of the risks associated with using blockchain in financial markets, the EU launched its Markets in Crypto Asset (MiCA) law to regulate participants in the sector.
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