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Blockchain technology is becoming increasingly popular and offers a secure alternative for many in the financial industry. This also applies to the issuance, trading and settlement of shares and bonds. This is exactly what the European Union (EU) will be focusing on testing, as the European Parliament in Brussels approved a five-year pilot.
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Opportunity for EU member states
The measure was first proposed by the European Commission, and it gives EU members the chance to test new crypto applications that would otherwise be blocked by existing laws governing financial market infrastructure. Member of Parliament, Johan Van Overtveldt, said the following:
“It is essential not only to make existing financial legislation fit for digital, but also to be open to new technology that can make financial markets safer and more efficient.”
But Van Overtveldt, who previously served as Belgium’s finance minister, warned that crypto experiments that appeared to work on a small scale could still pose unexpected risks if they go beyond the pilot phase, adding that lawmakers in the future “should research the exceptions thoroughly… before scaling it up.”
Overtveldt isn’t the only one excited
However, Van Overtveldt was not the only one who was very pleased with the decision to test blockchain technology. For example, Mairead McGuinness, the European Commission’s top financial services official, described it as “pioneering work” that could enable financial markets to “experiment more safely” with innovative technology through traditional financial instruments such as stocks, bonds and tokenize exchange-traded funds, despite the restrictions normally included in European law.
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Image and article originally from invezz.com. Read the original article here.