Crypto: How Europe’s Blockchain Sandbox Finds Innovation In Regulation
The EU regulated blockchain earlier than most major economies. Its sandbox now tests whether dialogue unlocks innovation inside legal fences.
The European Union, often criticized for prioritizing rulemaking over innovation, is pointing to the European Blockchain Sandbox as an example of how regulation can boost innovation.
After three cohorts of confidential dialogues, the initiative has produced a 230-page best practices report and drawn in nearly 125 regulators and authorities.
The European Commission tapped law firm Bird & Bird and its consortium partners to lead the initiative, which matches blockchain use cases with regulators for confidential dialogues aimed at clearing legal challenges.
Marjolein Geus, a partner at Bird & Bird, told Cointelegraph that the process has shown compliance need not be a deterrent.
“For use case owners, it helps them better understand the relevant regulations and how those rules apply to their projects,” she said. “It allows regulators and authorities to deepen their understanding of how those technologies interact with the regulatory frameworks within their areas of competence.”
In the latest cohort, “mature” use cases were increasingly operational and embedded in sectors such as energy, healthcare and artificial intelligence, bringing along more complex compliance discussions.
When the Markets in Crypto-Assets Regulation (MiCA) was adopted, observers warned that strict obligations would raise barriers for startups. Stablecoin rules drew particular scrutiny as Tether — issuer of the world’s largest stablecoin — ultimately decided against seeking MiCA authorization for USDt (USDT).
The brain drain narrative predates crypto. European founders have often incorporated in jurisdictions perceived as having a lighter touch.
Similar fears surfaced when the General Data Protection Regulation (GDPR) took effect in 2018. Businesses complained of interpretive confusion and administrative burden. Some foreign firms scaled back EU exposure. However, the GDPR has since become a global reference point, with many multinationals aligning operations to its standards.
Source: CoinTelegraph
