The European Commission announced on February 15 the launch of the European Blockchain Regulatory Space. The sandbox will provide a space for regulatory dialogue for 20 projects a year until 2026.
The sandbox was first announced in 2020 and is being facilitated by a number of private companies that won bids in 2022. Funding will come from the Digital Europe Programme. Projects will be chosen by an independent panel of academic experts on a competitive basis of public and private sector use cases of “Blockchain and other distributed ledger technologies.”
Among the applicants, public sector projects on the European Blockchain Services Infrastructure (EBSI) will be considered. The EBSI is a pan-European blockchain managed by an association of the EU countries with Norway and Liechtenstein.
Members of the annual sandbox cohort will be paired with EU and national regulators to receive confidential legal advice and regulatory guidance, while regulators will have the opportunity to familiarize themselves with new blockchain technology.
The application period for the first cohort of projects ends on April 14. Projects must have a proof of concept validated according to the specifications and have a cross-border dimension.
With our consulting arm OXYGY, today we announce, together with the @EU_Commissionthat applications are now open for the first cohort of the European blockchain regulatory sandbox for blockchain/DLT innovators @EuropeanSandbox:#blockchain #sandbox https://t.co/ZNbjUCTubp pic.twitter.com/PtdS0oBS8p
—Bird & Bird (@twobirds) February 14, 2023
Projects already chosen by public officials for deployment will have priority. Companies must be based in the European Economic Area (EEA). Those companies that operate in consortium with companies from outside the EEA, provided that the beneficiary of the project is the company based in the EEA. The expenses of the participants will not be reimbursed.
Selected projects will receive a written legal assessment, followed by two virtual meetings with participating regulators. The EBSI Early Adopters incubator program is also accepting applications for its third cohort.
A similar sandbox program was proposed in Rep. Patrick McHenry’s Financial Services Innovation bill. The UK may also have a comparable sandbox program in the next round of financial services reforms.
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