After regulating cryptocurrencies, European politicians are contemplating the next step in the race to attract Web 3 business – and it might be a tailor-made blockchain that respects privacy, Belgium’s digital minister told CoinDesk in an exclusive interview.
A new “Europeum” blockchain could be the vehicle to record property ownership, driving licenses or professional qualifications while sticking to the European Union’s high regulatory norms, Mathieu Michel said.
After a string of scams and scandals, Michel is in favor of moving away from purely financial applications of distributed technology, into public services and supply-chain management.
The EU has already drawn a line in the sand with its Markets in Crypto Assets regulation (MiCA), which sets governance and stability rules for cryptocurrency service providers.
If voted on in April, the bloc could become the world’s first major jurisdiction with a clear crypto framework – but the story shouldn’t end there if Europe wants to lead the world in blockchain, said Michel, a member of the French-speaking centrist party MR.
MiCA “goes in the right direction, but it’s only a first step,” Michel said, saying the bloc should consider “a blockchain network constructed around the foundational values” that underpin European society.
“Imagine you have Europeum – the blockchain that contains a whole series of conditions for protecting private life and so on, which are very transparent,” he said, conjuring a word that appears a play on the name of the Ethereum network. Instead of the political minefield of cryptocurrency, he said, it could focus on areas that are less sensitive or prone to abuse – like digitizing administrative documents or educational diplomas to be recognized across the bloc.
For Michel, high European standards in areas such as data privacy – safeguarded by the EU’s General Data Protection Regulation – are an asset that the bloc can use to carve its own digital niche. Now, he believes, they may need to be reflected in Web 3.
“Ethereum is traceable – I find that crazy,” he said of the trait that allows users to see full transaction details for a given wallet, a level of transparency he sees as excessive. “If you go to eat with your mistress at a restaurant, do you want it to appear on the blockchain?”
Michel, convinced that Web 3 can help companies organize their supply chains and governments offer public services, is on a mission to make his country a hub for Web 3 activity. On Feb. 20 he launched Blockchain for Belgium, to offer advice to policymakers, and provide networking opportunities for entrepreneurs in the sector.
Michel is frank about the challenges. Europe isn’t as easy a place to raise capital as the U.S., making it less attractive for any kind of startup. The situation is still harder given Belgium’s complex federal structure: key policies don’t lie in Michel’s hands, but in those of regional governments, or the finance minister, Christian Democrat Vincent van Peteghem – people who, Michel says, don’t always share his appreciation or optimism about the technology.
Michel nonetheless cites a range of blockchain projects – Datavillage, Solid and Settlemint – that chose to make the country their home, and cites a highly skilled workforce as chief among its strengths.
If Michel hopes a community of blockchain enthusiasts can help overcome lawmaker skepticism, it’s clearly not going to be easy.
In a March 8 parliamentary debate, held after the interview, lawmaker Michael Freilich said he was “disappointed” with the Blockchain for Belgium initiative, because, rather than acting immediately, the government is seeking recommendations that might only arrive towards the end of its mandate.
“I was expecting more… the results will once again be nothing,” said Freilich, who is from the right-wing New Flemish Alliance, which is the largest grouping in the Federal Chamber but isn’t one of the seven parties that form the governing coalition.
High among the complaints of the crypto community is the Belgian tax system – which imposes the highest labor levies in the developed world, and leaves the taxation of investment income in an unhelpful legal gray area. Michel suggests he’s been listening; he says he’s working on changes to clarify when and how virtual earnings should be taxed, something he says could help make Belgium “the Switzerland of blockchain.”
For blockchain entrepreneurs like Julien Romanetto of the Smurfs Society, a company which produces non-fungible tokens (NFTs) of characters from the Belgian cartoon, the support from Michel is welcome – not least because policymakers have such a crucial role to play in determining the ecosystem’s future.
“Europe has a strong hand to play in blockchain,” Romanetto told CoinDesk. “There needs to be regulation, but it shouldn’t constrain… too much regulation and people will go to Dubai.”
“It’s great the government is doing something, but just setting up a WhatsApp group won’t be enough,” Romanetto said.
Quotes have been translated from French.