The sandbox will match up public and private sector projects with the appropriate participating regulators for assessments and consultations.
The European Commission announced the launch of the European Blockchain Regulatory Sandbox on Feb. 15. The sandbox will provide a space for regulatory dialog for 20 projects per year through 2026.
The sandbox was first announced in 2020 and is being facilitated by a number of private firms that won tenders in 2022. Funding will come from the Digital Europe Programme. Projects will be chosen by an independent panel of academic experts on a competitive basis from public and private sector use cases of “Blockchain and other Distributed Ledger Technologies.”
Public sector projects on the European Blockchain Services Infrastructure (EBSI) will be considered among the applicants. The EBSI is a pan-European blockchain run by a partnership of the EU countries with Norway and Lichtenstein.
Members of the annual sandbox cohort will be matched with national and European Union regulators to receive confidential legal advice and regulatory guidance, while regulators will have the opportunity to acquaint themselves with new blockchain technology.
The application deadline for the first cohort of projects is April 14. Projects must have a proof of concept validated according to specifications and have a cross-border dimension.
With our consulting arm OXYGY, today we announce, together with the @EU_Commission, that applications are now open for the first cohort of the European blockchain regulatory sandbox for blockchain/DLT innovators @EuropeanSandbox:#blockchain #sandbox https://t.co/ZNbjUCTubp pic.twitter.com/PtdS0oBS8p
— Bird & Bird (@twobirds) February 14, 2023
Projects already chosen by public officials for deployment will have priority. Companies should be based in the European Economic Area (EEA). Those companies operate in consortium with companies outside of the EEA, as long as the beneficiary of the project is the EEA-based company. Participants will not be reimbursed for their expenses.
Projects selected will receive a written legal assessment followed by two virtual meetings with participating regulators. The EBSI Early Adopters incubator program is also accepting applications for its third cohort.
A similar sandbox program was proposed in United States Rep. Patrick McHenry’s Financial Services Innovation bill. The United Kingdom may also get a comparable sandbox program in the next round of its financial services reforms.