EU Won’t Regulate Blockchain — For Now

The European Union has decided it won’t take a formal stance on regulating blockchain, at least for now.

According to the EU parliamentary committee, now is not the time to regulate. Instead, the group determined it was best to keep a watchful eye over the technology that underpins bitcoin without being overarching. That’s one way the group can determine what the next best step is, while still allowing innovation.

“We don’t want preemptive regulation, but we do want precautionary monitoring,” Jakob von Weizsaecker, a member of the European Parliament, told Reuters. This report was also supported by the parliament’s economic affairs committee.

The biggest push, both in the U.S. and across Europe, has been to see where and how blockchain’s tech could be implemented in a way that makes financial services faster, cheaper and more effective. This includes things like payment transactions and stock trades.

The unknowns, of course, have left regulators worried that it’s too early to set rules for a technology that has not been fully explored.

“One reason why regulating now in detail would be difficult is that we don’t know yet what the most important use of blockchain might be,” von Weizsaecker told Reuters.

Eventually, he noted the EU will likely draft a regulatory framework to keep a watchful eye over blockchain and how it’s being used to move money and trades. A task force is set to gather recommendations for what that framework should look like. This decision will enable FinTech solutions to be tested next month in order to gain a better sense of what those rules should look like.

And, according to reports out of the European Central Bank earlier this week, it said it was testing blockchain, as is the Bank of England. But Andrew Hauser, Bank of England executive director for payments, noted that regulators must keep ahead of blockchain’s regulation.

“Central banks can’t afford to be Ubered,” Hauser said.