EU Blockchain Sandbox Reveals Initial 20 Use Cases Following Surge in Applications

After a significant influx of applications in April, the European Union’s regulatory sandbox for blockchain technology has announced its first 20 selected use cases. This initiative, first introduced in 2020, aims to bridge the regulatory gap between European countries and crypto companies operating in the region.

The European Commission disclosed that the projects cover a wide range of industries, including finance and capital markets, telecommunications and IT, global trade, transportation, and cross-sectoral collaborations. These projects have been chosen from a pool of 90 applications received during the selection process.

The selected use cases are distributed across five regions in Europe, with Western Europe leading the way with 14 projects, followed by Southern Europe with 10 projects. The Nordics and Central Europe each have eight projects, while Eastern Europe has seven projects in the first cohort.

The establishment of a regulatory sandbox for blockchain technology was initially announced by the European Commission and the European Blockchain Partnership (EBP) in 2020. The main objective of this initiative is to facilitate dialogue between regulators, crypto projects, and public authorities.

The European Commission stated, “During these dialogues, use case developers can present their business cases and receive legal guidance from regulators.”

Bird & Bird, a prominent law firm with a global presence, is collaborating on this initiative and will act as a mediator between developers and regulators. The firm will provide legal advice and regulatory guidance to the selected projects, ensuring a safe and compliant interface.

The sandbox’s ultimate goal is to enhance regulators’ understanding of distributed ledger technology (DLT) and blockchain advancements. The knowledge and insights gained will be shared among regulators to identify best practices, aiding the European Commission in its pursuit of a regulatory framework for the technology.

The regulatory sandbox will operate in conjunction with other frameworks, including the EU Digital Finance Platform and the upcoming Artificial Intelligence Sandboxes established under the AI Act. This integration is crucial due to the growing convergence of innovative technologies across various industry sectors.

The application period for the first cohort closed on April 14, with a focus on blockchain projects demonstrating valid proof of concept and cross-border elements. The sandbox will continue to select new projects on an annual basis until 2026, fostering innovation and regulatory development in the blockchain space.

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