Speech by Commissioner for Digital Economy and Society Mariya Gabriel on blockchain applications

Good afternoon, ladies and gentlemen, founders, honourable Members of the European Parliament, and representatives of the United Nations, the World Bank, EIB, EBRD and the OECD.

Dear founding members – this is your great day! It is my sincere pleasure to celebrate with you the foundation of the International Association for Trusted Blockchain Applications. You can be proud to be part of this initiative from the first day.


Technological innovation matters.

It affects how we live, how we work, how we protect our climate and how we generate welfare. If Europe misses out on technological innovation, we pay a price. This price is measured in the loss of potential jobs, prosperity and opportunities – and that would be a very real loss, too.

Europe must make more of technological innovation and Blockchain technology is an innovation that Europe cannot afford to miss.

At the same time, it is clear that we need strong governance if we want to get the most out of distributed ledger technologies for the general interest, that means for our economy and for our society.

Ladies and Gentlemen,

Let me begin by asking: Why are distributed ledger technologies relevant?

The answer relates to a deeply human concept, trust. Any economy relies on trust. Without trust, it simply does not work. Trust is at the basis of business relationships, of financial services and public policy. And without this trust, contracts or laws are just pieces of paper. Trusting the other side to honour their commitments, that is what gives them power and makes them useful.

Ladies and Gentlemen,

As we all know, trust must be earned. For example, through long-standing relationships and through knowing people, meeting them, testing them.

In today’s economy, however, there is less and less time to build trust in the way it happened in the past. To fight cancer, to balance renewable energy, to trace the authenticity of goods, actors must be able to trust one another without meeting face to face.

How can we achieve this?

Of course with the help of a blockchain! Blockchain achieves this by removing the need to put trust into individual contractual partners. Once a contract is agreed, it becomes “smart” and self-executing. What does that mean? Well, think about a vending machine: that machine does not need to trust you because it automatically executes the sale of a good. Once it has the coin, it gives you the product. You only have to trust the system, i.e. that the vending machine is in good order.

With blockchain, all participants rely on the overall system, the entire chain of transactions. It cannot be attacked by individual malicious actors, because it is distributed across the network and many different computers. And where the vending machine has physical protections, the blockchain has mathematical ones which are even more difficult to break.

But blockchain technology is not only useful in such familiar settings of individual transactions. There are other areas in which it can help us to establish system-wide trust.

Take supply chains as an example. The origins of processed meat are hard to trace back with our current technologies. You may remember the 2013 horse meat scandal when European consumers where very surprised to learn that what had been sold as “beef burgers” actually contained horse meat.

Or take pharmaceuticals. Who guarantees that pharmaceuticals actually correspond to what is printed on the package? Counterfeit pharmaceuticals and repackaging are among the world’s largest fraud markets. Fake medicines pose a severe threat to patients, as they may contain ingredients of bad quality or in the wrong dosage.

In short, the this is among the most effective means we have to fight fraud and to protect Europe’s consumers.

However, Distributed Ledger Technologies are about much more than exchanging data in a safe manner. They allow us to rethink entirely existing business processes from scratch.

Every time we shop online, or do an Internet search, we leave a trail of data behind us. Every time we walk around town with our smartphones in our pockets, they’re building up a record of the places we’ve been.

Today, all this data is centrally collected and then “harvested” by platforms.

But what would happen if and after breaking up the existing giants? New platforms would take their place and the development would continue towards more centralisation.

It is in this context that Blockchain and other DLT show their greatest potential: They can fuel new user-centric solutions that put individuals at the centre and give them control over their online identity, their data and their privacy.

That is the promise. A technology to lift the decentralisation of the web and of the internet to a new level. Yes, today Blockchain technology is still only in its infancy. But if we want to reap those benefits, we need to help develop and support it. And that is precisely why it is now such an important technology area when it comes to European Union support.

We have already taken initiatives at four levels.

This is important. Innovation thrives in ecosystems where academics, developers and users of new technologies collaborate closely.

That is why I have launched the European Blockchain Observatory & Forum last year. Many of you have already participated in this first initiative and I would like to thank you for your engagement.

The Observatory has mapped blockchain initiatives around the world. It has mobilised experts, organised workshops and published a series of widely read reports.

It has been a big success. Over 1500 stakeholders are interacting on this platform. More than 550 active blockchain projects have been identified in Europe alone. Numerous workshops have taken place and reports have been published on digital identity and privacy, on the next generation of blockchain infrastructures, on interoperability and on GDPR compliance.

An area where blockchain technology can make a difference is the digitisation of our public administrations.

This is why, starting on Digital Day 2 last April, EU Member States have expressed their commitment to cooperate on designing and deploying distributed ledger technologies for cross-border public services. This endeavour, the European Blockchain Partnership, now counts 29 EU and EEA Member States.

The Partnership and our experts are working together to set up a European Blockchain Services Infrastructure. This Infrastructure for the public sector will allow for the safe exchange of sensitive data in a secure environment across borders.

For example, this service infrastructure will help our citizens to share university diplomas in a digital format across borders without having to fear that their data gets compromised. And another example: Customs authorities will be able to exchange data to verify import declarations for goods and help us to fight fraud by notarising payments from EU funds.

And soon, the European Blockchain Services Infrastructure will also support public-private partnerships and thus bring the same robust infrastructure to private services as well.

Europe must support strategic digital capacities in order to benefit from the digital revolution.

This is why the European Commission has proposed a new funding programme, the Digital Europe Programme, with a substantial budget of 9.2 billion euros. Blockchain is one of the initiatives along with the main prioorities Artificial Intelligence, High Performance Computing and Cybersecurity that will be supported by the Programme. A good part of it will also be spent on skills needed for the digital transformation. And this of course includes blockchain-related skills.

The European Commission has over the last months encouraged industry to set up this International Association for Trusted Blockchain Applications – INATBA. We have facilitate discussion and meetings.

Our rationale for doing this is simple: European efforts to bring DLT to the next stage would remain ineffective if they were not compatible with solutions developed elsewhere in the world. This is what we need to avoid. And it is what INATBA should help us achieve. And before you ask: Yes, we do have very high expectations! We expect that INATBA will:

  • promote an open, transparent and inclusive global model of governance for blockchain and other DLT;
  • support adoption of sector-specific and interoperability guidelines; and
  • establish a dialogue with public authorities and regulators at a global scale.

I am very glad to see that INTABA’s 105 founding members already come from all over the globe, from Europe, from Asia and from North America. INATBA should grow with many more companies joining, providers and users of blockchain technology, and companies large and small. Make sure that INATBA also lives up to its global nature and becomes truly representative of the stakeholder community.

It will equally be important for INATBA to establish permanent regulatory dialogues with governments soon. In all this, and this is a very important point for me, please make sure that the voice of smaller companies and in particular start-ups will always be heard loud and clear.

We very much look forward to the next stage of INATBA and seeing you all work together. I believe that we all agree on our ambition: help creating the global framework for bringing Blockchain and DLT to the next level. By the time the World Blockchain Congress takes place in Malaga this November, INATBA should already have its first operational results to show.

Ladies and Gentlemen,

Let me once again thank you for your passion and engagement so far, it is truly remarkable. I wish all of you, but especially this new International Association for Trusted Blockchain Applications, all the best and a lot of success!

Thank you for your attention.


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