EU Considering Proposal to Restrict or Ban Cryptocurrencies like Bitcoin
In April 2021, the European Data Protection Board (EDPB) presented a draft guideline for handling blockchain technology, aiming to provide a legal framework for the application of the General Data Protection Regulation (GDPR) in this context. The draft guidelines are currently in public consultation, with the EDSA still collecting feedback from the public.
The focus of the EDPB draft primarily revolves around potential issues arising from the interplay of personal data and blockchain technology. If public keys can be associated with a person, they can be considered personal data, and strict requirements apply for their storage on the blockchain. This includes data anonymization or deletion when no longer needed, and a retention period should be set for personal data storage on the blockchain. After this period, data must be deleted or anonymized.
Deleting data on an individual level in a blockchain can be challenging and may require ad-hoc developed architectures. The draft guidelines recommend storing personal data off-chain, and personal data should not be stored on the blockchain if it violates data protection principles.
Contrary to some speculations, the EDPB draft does not suggest that Bitcoin could be illegalized in the EU. The EU regulation for crypto-assets, Markets in Crypto-Assets Regulation (MiCAR), does not foresee the illegalization of Bitcoin. A complete EU-wide Bitcoin ban is currently considered unlikely due to technical and legal challenges, as EU regulations tend to focus more on oversight and integration of digital assets rather than outright prohibition.
The background of EU moves regarding Bitcoin and blockchain relates mainly to regulatory concerns about financial stability, investor protection, and the EU's push for a digital euro and market integrity. However, the EU is also concerned about loss of sovereignty and financial instability due to Trump's crypto policy.
Tristan, the editor-in-chief at Blocktrainer.de, has been actively involved with Bitcoin since 2020. He has a background in economics and journalism, and his insights on the subject have been valuable in understanding the EU's approach to crypto-assets and blockchain.
The target audience of the EDPB guidelines are companies and authorities that process personal data using blockchain technology. The guidelines aim to ensure compliance with GDPR while fostering innovation in the blockchain sector.
An MEP has called for a Bitcoin reserve, suggesting a more proactive approach towards the integration of digital assets in the EU economy. As the EU continues to navigate the complexities of crypto-assets and blockchain technology, the EDPB guidelines serve as a crucial step towards a more regulated and secure digital future.
