On July 3, Europe’s blockchain regulatory sandbox officially unveiled its inaugural set of use cases. This milestone follows a period of eager anticipation in the industry, culminating in nearly 90 applications filed in April. Initiated in 2020 by the European Commission and the European Blockchain Partnership (EBP), the sandbox is set to bridge the regulatory gap between European nations and crypto companies.

The Commission has accepted 20 projects for the first cohort, with participants coming from various sectors such as finance and capital markets, telecommunications and IT, global trade and transport. The projects have a broad geographical representation across Europe, with the highest number of 14 use cases in Western Europe, followed by Southern Europe with 10 projects, the Nordic countries and Central Europe with eight projects each, and Southern Europe. this one with seven

The sandbox, facilitated by UK-based law firm Bird & Bird, is designed to create a secure platform for dialogue between regulators, crypto projects and public authorities. Use case developers will have the opportunity to present their business case to regulators and receive legal guidance, fostering a mutually beneficial relationship between these entities.

In addition to its role as a facilitator, Bird & Bird will also help establish a secure interface for developers and regulators, providing the necessary legal advice and regulatory guidance for projects.

The European Commission stressed that the sandbox would “allow supervisors to improve their knowledge of cutting-edge technologies involving DLT.” The insights gained from this interaction will be shared among regulators, helping the Commission to identify industry best practice.

This regulatory sandbox is designed to work in conjunction with other initiatives, notably the EU Digital Finance Platform and the AI ​​Sandboxes under the AI ​​Law. The Commission highlighted that the integration of these frameworks is vital due to the growing intersection of innovative technologies in various industry sectors.

The sandbox’s inaugural application period, which ended on April 14, was open to blockchain projects that had a valid proof of concept and cross-border elements. The European Blockchain Regulatory Sandbox will continue to welcome new projects annually until 2026.

According to the official press release, the Sandbox project team witnessed great interest from the European and international blockchain community, cementing its status as a bridge builder between regulators and use case owners.

The selection process was conducted by blockchain experts from WBNoDE, under the careful supervision of an independent academic panel, including Professors Roman Beck, Soulla Louca and Walter Blocher. Selected projects are set to engage in dialogue with relevant EU and national regulators in a secure and confidential environment, after which a best practice report will be shared for the benefit of the wider Blockchain community.

The European Blockchain Regulatory Sandbox aims to facilitate cross-border dialogues, increase legal certainty for innovative blockchain solutions, and improve awareness of DLT technologies among supervisors. In addition, it offers an annual prize for the most innovative regulator participating in the sandbox.

The Sandbox, supported by the Digital Europe Program and the SME strategy, will operate from 2023 to 2026, supporting 20 projects each year, including public sector use cases on the European Blockchain Services Infrastructure.