On February 15, the European Commission made the announcement that it will launch the European Blockchain Regulatory Sandbox. The regulatory sandbox will serve as a discussion forum for around 20 new projects each year until 2026.

The sandbox was first announced in 2020 and is now managed by several private companies that won the bids in 2022. The Digital Europe Program will be responsible for providing the funding. Public and commercial sector use cases including “Blockchain and other distributed ledger technologies” will be considered for project selection, which will be conducted on a competitive basis by an impartial panel of academic experts.

Applicants from the public sector who have initiatives related to the European Blockchain Services Infrastructure (EBSI) will be considered. The European Blockchain Standards Initiative (EBSI) is a pan-European blockchain managed by a coalition of EU nations, along with Norway and Liechtenstein.

Participants in the annual sandbox cohort will be matched with national and European Union regulators for private legal advice and regulatory assistance. At the same time, regulators will have the opportunity to familiarize themselves with cutting-edge blockchain technology.

The deadline for applications to participate in the first round of projects is April 14. Projects must have a proof of concept that has been verified according to the standards and must have a dimension that crosses borders.

Priority will be given to projects that have already been selected for deployment by public authorities. The European Economic Area is where the headquarters of a company (EEA) should be located. As long as the EEA-based company is the one that ultimately benefits from the initiative, these companies can work in partnership with companies based outside the EEA. Participants should not expect to be reimbursed for any of their costs.

Each of the chosen projects will receive a written legal assessment, followed by two virtual meetings with the regulators involved. In addition, applications are being accepted for EBSI’s Early Adopters incubator program, which is now in its third cohort.

In the Financial Services Innovation bill that Patrick McHenry was introducing in the US House of Representatives, a comparable sandbox program was suggested. A similar type of sandbox program may also be included in the next iteration of the UK’s changes to its financial services industry.