Home
News
- A five-year pilot program that will work on testing the stock and bond issuance, trading, and settlement via blockchain technology, got approval from the European Parliament in Brussels.
- A parliament member, Johan Van Overtveldt, says that in addition to making current financial legislation fit for digital, it is also significant to adopt the latest technology that would make the financial market safe and efficient.
- Van Overtveldt, also a former Belgium finance minister, pointed out the experiments in crypto, saying that crypto experiments happening at a small level can result in unexpected risks if they go beyond the pilot stage.
The European Parliament in Brussels approved a five-year pilot program that will work on testing the stock and bond issuance, trading, and settlement using blockchain technology in the European Union.
The lawmakers are of the opinion that the pilot legislation is like placing a bloc at the “forefront of innovation.”
The European Commission first proposed the measure. EU members will get the opportunity to test the latest crypto applications that otherwise might get blocked by the current laws that govern the financial market infrastructure.
Johan Van Overtveldt, a member of parliament, believed that along with making current financial legislation fit for digital, it is quite important to openly embarrass a new technology that helps the financial market better in a safe and efficient way. Overtveldt played a significant role in negotiating the deal between Brussels and the national government, which got hesitantly approved last year.
Van Overtveldt, who also has served as the finance minister of Belgium, also highlighted that experiments in crypto that seem to be operating on a small scale would lead to unexpected risks if they forward the pilot stage.
Further, he said that it is not necessary that something that works in a limited testing environment will also work in the broader context, adding that lawmakers in the future, before upscaling, will have to inspect the exemptions.
The most senior financial services official of the European Commission, Mairead McGuinness, called it a “groundbreaking work” that would allow the financial markets to experiment safely with the innovative technology in a more efficient way by enabling traditional instruments such as stocks, bonds, and exchange-traded funds to be tokenized despite the strictures normally contained in EU law.
The legislative body plans to pass into law is a relatively pro-innovation move from a legislative organization that is also trifling with ending anonymity in online payments and mitigating proof of work assets, including Bitcoin, due to their impact on the environment.
In order to protect investors and safeguard financial stability, the pilot goes a little more ahead for some lawmakers, saying that it amounts to a loophole in laws on financial infrastructure and trading.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
