Interviewing Paolo Tasca: Executive Director at UCL Centre for Blockchain Technologies
So let’s start off with some news: last week the Federal Reserve Chief expressed serious concerns about Facebook’s (and others’) yet-to-launch cryptocurrency, Libra, before the US Congress. Do you think that this time around the weight and number of players involved could finally normalize the discussion on cryptos?
Regardless the fact that Libra’s backbone technology was invented by a UCL CBT Research Associate here at University College London, it is an interesting project, and it’s good to see regulators setting out their positions so clearly. What is taking place is not a novel discussion – regulators have been saying the exact same things to other proposed projects for many years now, in terms of respecting rules against money laundering, illicit finance, etc. But if Libra meets its goals, it will change how we speak about digital assets. Until now this dialogue has focused on bitcoin and its imitators, with all their volatility and other traits. A successful world-wide distributed retail digital coin like Libra could bring digital currencies within the stable of existing digital financial services that consumers trust and rely on day to day.
From your privileged point of view on blockchain projects, with a foot in Asia and one in Europe, where do you see distributed ledger applications being actually understood and leveraged? Which is, to you, the trait characterizing the European and the Asian contexts?
There will always be regional variations in the adoption of emerging technologies. Broadly speaking, projects in Europe still focus quite closely on financial services, whereas in Asia we see projects moving into production across many different industries (healthcare and supply chain for example). But what is more worrisome is the huge difference between the numbers of cryptocurrencies and blockchain-related patents filed by China and by European companies. Ironically, despite banning crypto, as of now, China filed about 800 patents while Europe “only” 45. Indeed, one of the most important indicators predicting the success of a Country-wide blockchain strategy is the numbers of patents. I am very concerned about this trend because it will inevitably impact the global equilibrium of the blockchain industry the years to come.
You are the Founder and Executive Director of the Centre for Blockchain Technologies at UCL, an initiative aiming to foster the adoption and integration of these technologies into our socio-economic system. Since at FinTechStage ecosystems really are “our thing” we can’t fail to ask: which is the single, paramount thing for the growing European blockchain ecosystem to succeed in an era of such rapid change? Which the biggest threat?
These two questions are closely linked. For an ecosystem to succeed, it must allow innovation in one part to thrive in every other part. For blockchain that means that it’s not enough for the law in one EU country to recognize digital assets as property. Digital assets must be property in all the jurisdictions in the ecosystem. Without that, the innovation in digital assets and digital financial instruments will be severely weakened. So the biggest threat is not that a single, big regulator will ‘shut down blockchain’. The biggest threat is that disagreement between countries’ regulators will make it impossible for the European ecosystem to grow and develop cohesively. In this respect, we are at disadvantage with respect to our direct competitors (USA and China) which benefit from more harmonised jurisdictions.