Today I had the pleasure to address the inaugural meeting of the International Association of Trusted Blockchain Applications (INATBA) in Brussels. In my speech I highlighted the significant potential of blockchain across a wide range of sectors and in connection with many other technologies - and the challenges we still face in bringing this fledgling technology into the global mainstream.

Today is an important and festive occasion. I am glad to see that INATBA was born in Europe with a global ambition. This moment will be remembered many years from now as a turning point in the development and implementation of blockchain technologies.

I would like to start by thanking INATBA's founding members for their hard work. Many of you have worked together with the Commission services to prepare the legal foundation and today's global launch, and I know that the spirit in the team is good. I would like to take this opportunity to congratulate the INATBA board members on being elected.

I am glad that so many key international organisations have already joined INATBA's Governmental Advisory Board, including the World Bank, the OECD, the European Bank for Reconstruction and Development, the European Investment Bank, the UNFCCC, UNICEF, and the UN World Food Program. It is also a pleasure to see so many of these organisations represented here today, marking their commitment to INATBA.

It is a commitment shared by many. Very soon we expect to see the governments of all EEA Member States, the Commission and the European Blockchain Partnership joining the Governmental Advisory Board as well. INATBA will truly become the platform par excellence for private and public organisations to interact.

Blockchain technology in Europe

Blockchain technology is well suited for Europe due to our decentralised setup. We see many interactions across borders between independent private and public organisations already taking place.

For example:

  • Austria uses blockchain technology to auction governmental bonds worth billions of euros;
  • Estonia is integrating blockchain technology into its digital e-voting system to render it even more robust against hacking;
  • Sweden is deploying blockchain technology to notarise real estate property transactions;
  • the French agriculture industry will use blockchain technology to improve its existing supply chains to guarantee the origins of high quality food;
  • Berlin has become a hub for blockchain innovation - and it is not surprising to see so many German start-ups among INATBA's founding members.

Europe's policy for the digital economy

Over the last few years we have worked to develop a truly digital single market for the European Union. It covers a very wide range of technologies and policy areas, many of which are really at the cutting edge of research and development but with very clear real-life applications: areas such as artificial intelligence, the Internet of Things, 5G connectivity or higher performance computing. Blockchain and other Distributed Ledger Technologies are an important part of this puzzle, with many of the technologies mutually reinforcing one another and eventually converging.  

However, for blockchain technologies to live up to their full potential, the right framework conditions must be put in place.

One key element is interoperability. Blockchain protocols are developed in parallel without being interoperable. How can we expect our innovative start-ups to develop apps that scale across blockchains if protocols differ so fundamentally that an app has to be re-written to make it fit on another blockchain?  Industry needs common definitions, standards and specifications.

Other key element is close coordination at public-private level, not only to leverage blockchain technologies for public services but in also to consider the existing regulatory framework and – where needed – adapt it.  

In Europe, we have managed to establish close coordination between the EU and Member States through the European Blockchain Partnership. Founded only a year ago, in April 2018, already 28 European countries have joined. The Partnership will build a European Blockchain Services Infrastructure to provide key public services cross border. This is a global first for Europe, and we now need industry to get organised to establish public-private co-operation at global level.

Another successful European initiative is the Blockchain Observatory & Forum: we have organised six workshops since February 2018, and there are 12 more to come; just last week in fact we held a very successful and interest workshop on the convergence of the Internet of Things and AI with Blockchain/DLT. We have also mapped more than 550 blockchain projects and are developing knowledge building and sharing.

Need for trust, sustainability, cybersecurity 

Blockchain technologies were conceived to dis-intermediate existing institutions. This creative destruction can lead to more efficient solutions that benefit citizens. But established intermediaries should only then be replaced by an algorithm if the underlying technology is truly reliable.

Trust is key. Too many ICOs were fraudulent in 2017. This has discredited ICOs and investors now stay away. Crypto currencies have also been a vehicle to fuel terrorism and tax evasion. We need the right regulatory framework to help blockchain technology break through. This framework should be developed in close cooperation between industry and policy makers.

Cyber security is another important element. Hacking of digital wallets discredits the robustness of blockchains in the public mind. Industry must work harder on technical solutions that are solid, not only for blockchains themselves but also for the applications that operate on top of the protocol layer.

Finally, sustainability. European Member States are united in their fight against climate change. A key part of this will be ensuring the sustainability of our economy. There is a clear need for blockchain technologies that significantly reduce the carbon footprint of our economies by gradually replacing consensus mechanisms which consume high amounts of electricity.

Why INATBA?

Why has the Commission facilitated INATBA's creation?

Blockchain/DLT technologies are still at an early stage. Most projects are pilots and tests, and there are still only a few examples of applications that are live. Like the world wide web in the 1990s, it will take public support to achieve breakthroughs faster.

But this time Europe is assuming its responsibilities and taking the lead. This this is why we have facilitated the creation of INATBA, an association that will address all the variables that will be decisive for making Distributed Ledger Technologies a success.

INATBA will :

  • Promote an open, transparent and inclusive global model of governance for blockchain and other distributed ledger technologies
  • Support adoption of sector specific and interoperability guidelines
  • Establish a dialogue with public authorities and regulators at a global scale

You have all that is needed to succeed.  

INTABA is a truly global association from day one. The 105 founding members come from all parts of the world, from Europe, from Asia and from North America.

European founders come from within the EU and from outside of it: Austria, Belgium, Bulgaria, Czech Republic, Denmark, Estonia, France, Germany, Hungary, Italy, Ireland, Liechtenstein, Lithuania, Luxemburg, Norway, Poland, Slovakia, Spain, Switzerland, The Netherlands, Turkey, UK.

North American founders come from Canada and the USA. Asian founders come from Japan. 

You now need to build on this.

  • INATBA should reach out to new members from Africa, Australia, South Korea, South America and India. You need to ensure a widespread representation based on a number of criteria (size, users/producers, geographic spread, and legitimacy: competence, transparency, inclusiveness, legal compliance).
  • You need to set the Governmental Advisory Board working, quickly establishing working groups and identifying verticals where specifications and standards are needed. You need to identify concrete regulatory problems that could be addressed through legislation. The ball is in your court. Once that preparatory work is done, we will help you reach out to the relevant regulators in Europe and beyond.
  • INATBA should adopt an ambitious work programme for 2019 before the summer. It should set priorities not only where blockchain technology is already advanced (finance, supply chain management) but also in those verticals where blockchain technology can in the long term generate its greatest benefits for citizens (sustainable energy sector, healthcare & pharma, the circular economy & blockchain for "social good", for example).
  • You should share knowledge on best practices in co-operation with the Commission and the European Blockchain Observatory & Forum. And I expect to see a real contribution from INATBA to the World Blockchain Congress in Malaga in November. This will be an excellent opportunity for you to broaden your membership to African and Asian companies. You should be able to present the first results of your work to the audience for discussion. We count on your support to make the conference a success.

Let me finish by congratulating you - the board and founding members - once again on the creation and launch of INATBA; we have high expectations of what you will be able to achieve and certainly stand ready to play our part in working across the entire blockchain sector to achieve the breakthrough we all want to see.

Thank you