(CoinDesk) The European Parliament has approved a five-year pilot program to test the use of blockchain technology for stock and bond issuance, settlement, and trading.
The lawmakers in the EU lauded the proposed legislation, saying it puts the bloc at the “forefront of innovation.”
The pilot legislation, first initiated by the European Commission, is set to offer EU members an opportunity to test out new crypto applications likely to be outlawed by the existing regulations that govern the financial markets.
European Parliament member Johan Van Overtveldt says there is a need to make the existing financial regulatory framework fit, more efficient, and safer for digital technologies.
Van Overtveldt still warned of unexpected risks on crypto experiments beyond the pilot stage. He says regulators should “thoroughly scrutinize the exemptions in crypto experiments before upscaling.
The plans by the EU represent a pro-innovation move by the bloc, which has often raised concerns of the anonymity in online payments and the proof-of-work mechanisms.
Some EU regulators still warn that if the pilot moves forward, it will lead to loopholes in the laws that govern the financial trading and infrastructure for investor protection and market stability.
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