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2023: EU Parliament passes law regulating smart contracts
On March 14, 2023, the European Parliament voted to pass a new law regulating smart contracts. We are talking about the introduction of an "emergency switch to reset activity" - the so-called Kill Switch function. Read more here.
2020: IDC: spending on corporate blockchain projects will grow by 60% despite coronavirus
In early May 2020, research company IDC announced a forecast according to which spending on corporate blockchain projects in Europe in 2020 will grow by 60% despite the COVID-19 coronavirus pandemic.
Earlier, IDC predicted that the costs of European companies for blockchain solutions in 2020 will amount to $1.45 billion. The pandemic affected business operations and innovation, after which IDC worsened that forecast by 8%. Nevertheless, even in this case, the increase to $1.33 billion exceeds 60% compared to 2019.
 | The pandemic and subsequent quarantine measures have negatively affected many industries, and we expect a significant reduction in spending in the technology sector, "explained Carla La Croce, head of IDC's blockchain division. - Due to the decrease in demand from customers, disruption of supply chains and the transfer of employees to remote work, many companies suspend innovative projects, including those related to blockchain, until the situation stabilizes. |  |
IDC considers the most vulnerable sectors of the technology market of business and IT services (a decline of 16% is predicted), followed by the software sector (a decline of 12%). Overall, IDC revised spending cuts for all vertical markets and identified the most severe declines in the personal and consumer services, manufacturing, resources, utilities, telecommunications and all sectors of the financial sector. It is expected that the total indicator of the total CAGR by 2023 will decrease by more than 3 percentage points compared to the forecasts presented before the COVID-19 pandemic.
However, although the introduction of innovations will slow down due to the reduction of research projects, IDC believes that blockchain technologies already used will reduce the negative impact of COVID-19 on supply chains.
Although the COVID-19 pandemic has negatively affected the blockchain industry, the changed situation may open up new opportunities, says IDC analyst Radoslav Dragov. For example, the coronavirus crisis has caused serious disruptions in international supplies. Long, complex chains make it difficult to predict and plan supplies, and these problems may well be solved by blockchain, he said.
| | Given the benefits of blockchain - the transparency of the supply chain and the ability to track goods - investment in this industry is expected to decline only for a while in 2020 and grow again shortly after the easing of the pandemic, La Croce said. | |
IDC also believes that during the COVID-19 pandemic, blockchain projects can be used to monitor contact persons, help victims and in the field of insurance. Collecting information about the spread of the virus and at the same time maintaining the confidentiality of personal information of citizens is a difficult task. However, blockchain can be used to effectively collect and match patient data and track their movements without compromising personal data.
In addition, IDC believes that in the future blockchain will be actively used in the electronic voting process. The traditional process puts politicians, voters and everyone involved in providing these services at risk. However, the risk can be avoided when using blockchain, says IDC analyst Mohamed Hefny. The biggest hurdle, however, remains the general public's skepticism and distrust of voting using digital technology. Perhaps the current situation will become a new incentive for electronic voting programs throughout Europe.[1]
2019: Blockchain could kill Britain's tax and medical systems
At the end of October 2019 McKinsey , John Straw, a senior employee of the consulting company and an expert at Business 5.0, said he blockchain could kill the tax and medical systems. With Britain this forecast, Straw spoke on behalf of McKinsey and at IBM a recent Computing Cloud and Infrastructure Live event on the Business 5.0 model.
According to Strough, if a scalable financial system based on blockchain technologies such as Ethereum gains sufficient popularity, then most of the financial services industry will become irrelevant, which will not only lead to the collapse of the City of London, but also to the destruction of those systems that exist thanks to taxes received from there.
| | Let's say someone will actually develop a valid peer-to-peer [financial] blockchain system. If such a lending system turns out to be really scalable, we will no longer need banks. And without banks, central clearing houses will not be needed, and the entire business model of the City of London will collapse. The question is - then who will pay taxes? | |
According to accountants, PwC taxes from the financial services sector, Great Britain which are mainly based in, amounted to London about £75 billion in 2017-18. This share is just under 60% of the £130bn budget that was allocated health care to social care in the same financial year.
The decline in tax revenue as a result of the loss of the banking industry will not be the only problem, Straw warns. The loss of the City of London will exacerbate the trade deficit also because financial services will no longer generate significant profits in UK trade with the rest of the world.
In addition, Straw added, the anonymous payments would contribute to government tax evasion. If payments are absolutely anonymous, then taxpayers are unlikely to simply change traditional financial services to blockchain partners. Therefore, Straw supports the calls of France and Germany to ban global projects with cryptocurrency.
| | Blockchain makes transactions invisible to the taxpayer. That is why France and Germany banned Libra [the company's proposed Facebook cryptocurrency], and these restrictions are quite fair, "said Straw. - Blockchain can in many ways be called the "killer of democracy." | |
Not everything is so sad, Straw notes - for example, blockchain technologies can be successfully used to create mandatory "smart contracts." He explained that being able to conduct fast automated transactions while reducing the need for services such as escrow and lawyers is a huge benefit. Stroe notes that "smart contracts" can become one of the cornerstones of the Business 5.0 model.
Despite this, dozens of banks and financial institutions around the world are exploring the possible use of blockchain technologies, not intending to give up without a fight. Thus, the City of London is taking measures to create a new business model before cryptocurrencies and blockchain can destroy the old one, burying not only the entire banking industry, but also the tax system, as well as UK health care. However, the head of Facebook, Mark Zuckerberg, believes that the financial industry has long been stagnating and needs to create a strong digital infrastructure to support innovation, so the confrontation between the new and old models can push the long-needed development of the system.[2]
2018: Expenses amounted to $400m - IDC
In 2018, European companies spent a total of $400 million on blockchain solutions, and almost half of the investment fell on the financial sector. This is evidenced by IDC data released in February 2019.
Banks, insurance, leasing and investment companies in Europe spent more than $172 million on the development and implementation of blockchain products, which corresponds to 43% of the total market. The top three industries with the highest costs of such technologies included industrial production and the mining industry ($80 million), as well as the service sector ($44 million).
| | The European market is not as flexible compared to other regions, and also more fragmented in terms of business size, says IDC analyst Carla La Croce. - Nevertheless, as previously noted by IDC, 2018 was the year of the blockchain. European companies have shown increasing interest in the technology and supported it with growing investment. Companies recognize the importance of the technology and begin to explore how it can be used in their business, moving beyond pilot projects and identifying the best use cases. | |
According to Mohamed Hefny, Program Manager for System and Infrastructure Solutions at IDC CEMA, blockchain offers huge opportunities for startups and emerging markets, where government support and highly qualified personnel create favorable ground for real projects.
Europe is second in spending on blockchain solutions only to the United States. The European market is expected to grow by 80.2% annually and reach $3.5 billion in 2022, approaching the American one in volume.
In Europe, retail and manufacturing enterprises demonstrated the highest growth rates of investment in blockchain in 2018.[3]
Notes
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