European Commission ‘should create fintech union’

The European Commission should work on setting protocols and standards to allow European-wide co-operation on fintech, according to Vilius Sapoka, Lithuania’s finance minister.

  • By Jasper Cox, Lewis McLellan
  • 08 May 2019
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“Investing into the disruptive innovations is less risky than not investing at all,” Sapoka told GlobalMarkets in an interview. “So I think that should be the main focus of not only the national agendas but European agenda as well. Therefore I call for a fintech union as well.”

Sapoka also spoke on a technology panel at the EBRD annual meeting in Sarajevo. When asked how the European Commission could facilitate the adoption of blockchain technology, several of the panellists highlighted its role as a means of setting standards that could be adopted internationally.

In an effort to begin providing these standards, the European Commission has launched the International association of Trusted Blockchain Applications.

Most agreed that ensuring that blockchains were interoperable was a key part of a greater adoption of the technology.

Without a shared set of standards, it is difficult to ensure that various blockchain protocols can provide any benefit. Either each counterparty in a complex market must use the same blockchain, or blockchains must be able to talk to each other.

Jelena Madir, chief counsel at EBRD, said: “The European Commission, as an independent entity, carries a lot more weight than a national body or company, so it can make recommendations that the broader market will adopt.”

The EBRD also has a role to play. “When the EBRD uses a technology, it provides credibility and a seal of approval that encourages others to use it,” said Madir.

Sapoka encouraged the EBRD to invest in blockchain start-ups, but Madir said that it was a difficult proposition. “It has to be a bankable proposition. We have a VC fund, but even that is reasonably conservative.”

Blockchain use cases

Trade finance is the main area in which companies are adopting blockchain. “If there are multiple parties trading and interacting who don’t necessarily trust each other, then there is an opportunity for blockchain to add value,” said Madir. “Trade finance, where there are importers, exporters, transporters, producers and buyers, is a perfect example.”

Blockchain cannot be changed without the consent of each member and preserves an immutable record of its data. “Centrally managed systems are open to manipulation, particularly in areas where corruption is a significant risk,” added Madir.

The panel discussed OriginTrail, which uses a decentralised network to prove the origin of food, making complex supply chains more transparent.

The panel was moderated by Madir. The speakers were: Vlaho Hrdalo, from the Union for Blockchain and Cryptocurrencies; Marko Kovacevic, chairman of the board for MVP Workshop; Marloes Pomp, blockchain programme officer for the Dutch government; Lukas Repa, deputy head of unit, directorate general for communications networks at the European Commission; and Sapoka.

  • By Jasper Cox, Lewis McLellan
  • 08 May 2019

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