EU body: GDPR could put the brakes on blockchain innovation
The EU Blockchain Observatory and Forum has warned that the recent GDPR law could negatively impact innovation in the blockchain space now that it is in effect.
The General Data Protection Regulation was activated two months ago and, according to a new report – Blockchain Innovation in Europe – the lack of clarity around the law may naturally lead to entrepreneurs failing to understand where they stand.
The report reads: “The law was conceived and written before blockchain technology was widely known, and so was fashioned with an implicit assumption that a database is a centralised mechanism for collecting, storing and processing data. As has since become clear, many of GDPR’s stipulations seem to clash with blockchain’s decentralised approach.
“Reconciling GDPR and blockchain will not only be a challenge for lawmakers. As long as the legal framework around personal data and blockchain remains unclear, entrepreneurs and those designing and building blockchain-based platforms and applications in Europe face massive uncertainty. That can put a brake on innovation.”
The report also notes that, as blockchain is still relatively new, it has the space to better comply with GDPR rules as it continues to evolve.
“Many see these tensions as irreconcilable, and conclude that a large number of blockchain projects are likely incompatible with GDPR,” it continues. “Some have even argued that blockchain technology is a threat to data protection.
“But there is cause for optimism as well. Both GDPR and blockchain at heart share the objective of data sovereignty, so blockchain could become a tool to achieve this objective.”