Due to the changing financial landscape in recent times, the European Union has been looking forward to integrating cryptocurrencies and blockchain technology processes in its processes as well within the next few years. Reuters recently reported that the European Union is fast-tracking the integration of blockchain technology and introducing regulations that would encourage the use of cryptocurrencies. The move by the European Union is primarily due to the fact that it would help ease cross-border payments and transactions due to the convenience, efficiency, and security afforded by blockchain technology.
As per the EU document tracked by Reuters, the European Union is looking to build a comprehensive framework regarding the assimilation of DLT or distributed ledger technology and blockchain technology in its financial landscape. The framework would also address the security concerns and risks associated with the use of such technology. The rationale behind the EU’s interest to encourage blockchain technology is primarily the need for cashless systems in today’s date. As of now, over 80 percent of the payments in the European Union is done through cash. It has become a hygiene issue, especially due to the ongoing global pandemic.
There is an urgent need for instant and secure cashless payments systems the world over, and the strategy adopted by the European Union clearly highlights it. Going by the EU’s current planning, the cashless systems should be in place by the end of next year. The European Union hopes to replace cash use with digital payment systems by developing and integrating relevant technologies and creating awareness among the end-users. The ongoing pandemic has defined the “new normal” for everyone in every aspect of life, and with regards to payments, digital and cashless payments are the new normal.
Even though the European Union is yet to confirm the adoption of any particular cryptocurrency, the EU’s central banks might come with one go-to currency. It is plausible that the European Union and its Central Bank decides to adopt stablecoin or the CBDC (central bank digital currency) for payments. There are many countries within the European Union that are testing the possibilities of launching the central bank digital currency as the primary go-to cryptocurrency for digital payments. Some of these countries include France, Sweden, and Switzerland.
Developing and launching a stablecoin for an entire continent seems like a mammoth undertaking. Still, if it is only specific to the European Union, it can work well with the existing fiat currency. The fear of cryptocurrency taking over completely is unfounded when it works in conjunction with the fiat currency. In any case, it is good news for the crypto market as the European Union’s adoption will build trust and add confidence among the consumers worldwide, not to mention that it brings awareness about the need for cryptocurrencies globally.
The European Union is well-known for developing, welcoming, and encouraging new technologies, and blockchain technology are no different. It enjoys a wide-scale academic as well as political support in the European Union, which is evident from the fact that its executive body launched European Blockchain Partnership in 2018. It functions at a political level across all the countries in the EU. It is working towards the mass adoption of blockchain technology to benefit its citizens, societies, administration, and economies.
Many of the larger industries in the European Union with a high CAGR of compound annual growth rates are moving towards blockchain solutions and blockchain technology adoption. The early adoption of new technologies and welcoming digital innovation has always worked to the EU’s advantage. In the context of blockchain technology too, it seems to be no different, and rightly so.