European Union: ICOs – The Necessity Of A European Regulatory Framework For Tokens
While regulators were still discussing the most effective way to regulate crowdfunding within the EU, a new wave of alternative financing overwhelmingly took them by surprise: ICOs are the new hype, and it seems like there is no other way to finance a project or a startup than to issue a new token via blockchain technology. One reason for the supervisory authority’s apparent paralysis is the complexity of the underlying technology, blockchain, which is difficult for someone without an IT background to understand. Initially, blockchains are not attached to any capital markets issues and are – simply speaking – tamper-proof distributed data structures in which transactions are recorded in chronological order and mapped in an understandable and unalterable form. Irrespective of any financial issues, blockchains are very helpful for the economy and can be used as technical support for several purposes (such as logistic track records, tamper-proof medication, product information for consumers etc.). However, blockchains can also be used to create new virtual currencies, known as cryptocurrencies. The best known of these, bitcoin, has made an impact in financial markets all over the world.