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Pioneering Web3 Solutions for Europe’s Digital Growth
TL;DR:
The IOTA Foundation is driving blockchain innovation in Europe through key partnerships and compliance with EU regulations. We aim to lead in Web3 identity solutions, sustainable DLT applications, and regulatory dialogues, positioning Europe as a global blockchain leader with a sovereign, open, and permissionless infrastructure.
The IOTA Foundation has established a strong and enduring partnership with the European Union. By participating in major EU initiatives and developing groundbreaking technologies, IOTA has consistently demonstrated its value as a reliable partner for both technical advancements and regulatory solutions in the DLT space. Here, we highlight EU-level initiatives and technologies where IOTA has played a pivotal role.
Pioneering Web3 Identification in the EU Blockchain Regulatory Sandbox 2024
The European Blockchain Sandbox is an initiative of the European Commission that creates a pan-European framework for regulatory dialogue. It aims to increase legal certainty for innovative blockchain solutions while promoting best practices across Europe.
As we announced in June, IOTA’s Web3 Identification Solution has been chosen for this year’s Sandbox. The solution is an advanced user authentication system that addresses the need for reliable identity verification in the Web3 space – learn more about it here. The solution is a suitable and functioning tool for KYC and identification processes and is being tested further in the Blockchain Sandbox. The sandbox serves as a stable environment that provides regulatory guidance aimed at facilitating and preparing such solutions for use in the fully regulated environments of the EU market.
Given this year’s EU Digital Identity Framework Regulation mandating that Member States offer at least one EU Digital Identity Wallet to all citizens and residents by 2026, the next few years will be decisive in the development of European digital identities. At the same time, through the direct collaboration with European regulators offered by the Sandbox, we’re helping shape the regulatory framework for digital identity, positioning the IOTA Foundation at the forefront of a decentralized, user-centric Web3. By successfully demonstrating our Solution within the Sandbox, we’re ensuring that our decentralized identity solution will be perceived as a possible and beneficial Web3 Identification option.
European Blockchain Services PCP: DLT Solutions for Europe
IOTA is one of just three finalists to have completed the two-year European Blockchain Services pre-commercial procurement (PCP), a project funded by the European Commission.
IOTA’s technology is ideal for the European Blockchain PCP. It offers a flexible, feeless, and scalable solution that complies with EU regulations, while its open-source software enables organizations to develop and operate public services. The technology is also environmentally friendly as it does not require proof of work and therefore consumes less energy – an important factor to consider when scaling these solutions across Europe.
From an initial 30 projects, IOTA passed the various phases of the PCP with excellent marks and completed the final phase alongside the two other finalists with remarkable results. In the initial phases of the PCP, we developed prototypes such as digital product passports for recycling and the cross-border management of intellectual property rights.
Ensuring MiCA Compliance: Transparency and Responsibility in the Crypto Market
The Markets in Crypto-Assets (MiCA) regulation sets new standards for the crypto market, ensuring that crypto assets and services meet the highest regulatory requirements. It aims to create a standardized set of rules for crypto markets in the European Union, thereby ensuring market integrity and investor protection.
Under MiCA, IOTA is dedicated to meeting new standards set for the European crypto market. Our efforts include:
- Policy Revision: We are revising our existing policies and processes to enhance the protection of insider information and prevent market manipulation.
- Whitepaper Update: We’re updating our whitepaper to provide comprehensive insights into the IOTA token and its underlying infrastructure, detailing its functionality, associated rights, and obligations, and conducting a thorough risk assessment in line with MiCA.
- Energy Transparency: We provide detailed data on the energy consumption of our technology, which can be accessed here. These figures are notably below the average energy consumption in the industry, underscoring IOTA’s energy efficiency and our commitment to environmental sustainability, a key aspect of MiCA regulation.
Forging Strategic Alliances for Europe’s Digital and Sustainable Future
In addition to its numerous projects and commitments within the European Union, IOTA is also an active member of several important organizations and alliances. These include the International Association for Trusted Blockchain Applications, the European Blockchain Association, and national associations such as the Bundesverband Blockchain e.V in Germany and the Green Fintech Network in Switzerland.
We’re also focused on demonstrating how EU regulations can be effectively implemented through our legally compliant products, highlighting their unique value. For example, the Eviden Digital Passports Solution powered by IOTA not only complies with the EU Battery Regulation but also adheres to the overarching Eco-design for Sustainable Products Regulation (ESPR) ESG reporting rules and supply chain regulations. Additionally, IOTA’s involvement in TLIP to improve cross-border trade further showcases the adaptability and regulatory alignment of its technology.
Outlook: Strengthening Europe’s Blockchain Ecosystem
At the IOTA Foundation, our mission is to be a pioneer in integrating blockchain and Web3 technologies across both government and industry, driving Europe’s digital transformation.
We believe that Europe’s leadership in this space is essential to ensure that the values of transparency, user control, and data protection are central to the development of Web3 technologies. We also believe that Europe’s digital future must be built on a sovereign blockchain infrastructure — one that is permissionless, open, and secure – if Europe is to maintain autonomy over its digital future, free from reliance on external or centralized entities that may not align with the EU’s regulatory and ethical standards.
With our involvement in the kind of initiatives described in this blog post, IOTA is uniquely positioned to help Europe achieve this lead position, offering scalable, energy-efficient, and regulation-compliant solutions that align with the EU’s vision for a digital and sustainable future.
Looking ahead, we’re also excited by the potential of working with European regulators and commercial partners on key focus areas of web3 development:
- Bringing the financial sector – including the foreign exchange market (Forex) – on-chain through tokenization.
- Developing stablecoins that are fully compatible with Web3 technologies, ensuring Europe remains at the forefront of digital currency innovation.
- Engaging in the development of regulatory frameworks that foster innovation in decentralized finance while protecting users.
- Exploring the intersection of AI and crypto to build secure, scalable ecosystems aligned with European values.
- Building solutions that facilitate a circular economy by improving the traceability of materials and products, creating transparency, and incentivizing recycling and reuse.
These projects represent the next frontier for blockchain in Europe, and we are excited to work with our partners to bring them to fruition. To discuss collaboration on any of these initiatives, contact [email protected].
Links in this article
IOTA Foundation Resources
- IOTA Web3 ID Solution Chosen for European Blockchain Sandbox
- KYC Done Right With IOTA
- IOTA Successfully Completes European Blockchain PCP
- Digital Product Passports for Electronics
- Smart Contracts, Smarter Rights
- Introducing Eviden Digital Passport Solution Powered By IOTA
- IOTA Web3 ID Solution Chosen for European Blockchain Sandbox
- Innovating Digital Trade in a Post-Brexit Landscape
European Union and European Regulatory Resources
- EUR-Lex – Regulation (EU) 2024/1183
- European Securities and Markets Authority – Markets in Crypto-Assets Regulation (MiCA)
- International Association for Trusted Blockchain Applications
- European Blockchain Association
- Bundesverband Blockchain e.V
- Green Fintech Network
- CCRI Crypto Sustainability Metrics