Data Driven Futures

Germany 'begins blockchain consultation'

Written by Hannah McGrath

The German government has launched a consultation into the potential of blockchain technology.

Sources told Reuters that staff and industry groups working with startups developing blockchain and distributed ledger technology (DLT) solutions have been invited to submit recommendations from this week onwards.

Berlin has fast become a hub for FinTech companies, with around 170 startups estimated to be developing applications for blockchain technology.

Blockchain, which keeps a permanent and immutable record of documents and data on a public or private ‘chain’ or ledger - secured by cryptography - is most widely known as the technology which supports digital currency Bitcoin.

It is hoped that blockchain technology, if properly regulated, could accelerate digital processes and data storage in a number of industries, including food supply chain, retail, cars, shipping, energy and the public sector.

If the German consultation process does result in a strategy for wider implementation and regulation of blockchain, it could help pave the way for a more standardised approach across Europe.

However, it would follow years of warnings from governments and central bankers over the viability of digital currencies and businesses based on blockchain and DLT due to its unregulated and anonymised nature.

In November last year, the head of the International Monetary Fund Christine Lagarde raised the notion of central banks around the world issuing their own digital currencies.

In March last year, Bank of England governor Mark Carney said that cryptocurrencies were too volatile to provide a viable digital system of money at present, but later said the bank is open minded on investigating the issue of a Central Bank Digital Currency (CBDG).

The financial services and supply chain-based industries, however, have been more proactive in their development of such technologies, with the head of Spanish bank BBVA stating that the emergence of international co-ordination on blockchain technologies is paving the way for the “decentralised economy of the future”.

Earlier this month, the UK authorities' understanding of blockchain was described as 'lamentable' by a panel of experts.