Blockchain Technology in Europe


Despite its inherent decentralised and non-localised nature, blockchain has spurred a growth of European ecosystems in the past years. Gravitating towards traditional tech startup hubs and locations with favourable regulation, the European blockchain ecosystem shows familiar patterns.


Clear regulations and a healthy startup scene, but like other countries in need of better funding

Corporate adoption of blockchain in France is relatively high. With the passage of the PACTE Act, blockchain has become even more friendly, as the oversight creates greater security in a market that has attracted some bad actors. Simon Polrot, President of ADAN, points to how ‘[n]ew projects are announced each month and big companies are leaning into the space’. This is representative of the strong grassroots blockchain network in France that has helped to shore up and drive forward corporate adoption. ‘Since 2017, [France has] seen an influx of serious actors enter the ecosystem’, according to Sebastien Couture, host of Epicenter podcast. And, while the country’s generally encouraging view towards startups has aided in fostering a strong ecosystem, the introduction of the PACTE Act is seen to be the next step in setting France up to a leader in blockchain by providing clear guidelines for businesses and protecting investors. Polrot continues that ‘France is one of the most friendly [countries] for digital assets-related activities, with great know-how and motivation’.


A world leader for capital and regulation, attracting businesses and foundations, but a smaller local community

Zug, or Crypto Valley, is seen as the European, if not global, blockchain epicenter. Initially known as a tax haven, the broad adoption of blockchain by the city has brought widespread recognition of the city both in and outside the blockchain community. According to Emi Lorincz, Founder of Women in Blockchain Switzerland (WIBS), there are ‘still many projects[…] considering setting up shop in Switzerland and the ecosystem is certainly healthy’. While the country is ‘seeing less projects’, Lorincz continues to say that the projects currently setting up are ‘higher in quality, more solid business models, competitive teams, and rarely an ICO’.


By far the most startups, but little enterprise involvement and an unfriendly fiscal situation leave room for improvement

Often whispered to be the unofficial birthplace of Ethereum, and with a history of counter culture and desire for self-governance, Germany is an attractive hub for blockchain startups. With the second highest amount of blockchain startups in the European Union (EU) at 8%, the majority of Germany’s blockchain community and companies are located in Berlin. While Germany’s government caught the attention of many with the release of a blockchain strategy that outlines plans for innovation, adoption, and legislation, the ecosystem is still largely driven by organisations from the ground up. This ground up approach is fuelled by a steady influx of talent into Berlin, and has led to several large players in blockchain registering in the city. However, while Berlin is still attracting talent, it may have reached the tipping point, with some startups looking into drawing on wider, global teams to find talent that they cannot easily source in the country. Like most blockchain ecosystems, crypto and finance dominate Berlin startups.

The United Kingdom

A stronghold for DeFi, with access to talent and funding, but a need for entreprise adoption and inclusive regulation

The UK housed 48% of European Union (EU) blockchain startups in 2018, and London had the world’s second largest amount of early stage funding for blockchain companies, securing its place as one of the most prominent blockchain ecosystems. As an existing global financial power, it is prime for a similar adoption of cryptocurrencies as Switzerland is currently experiencing. The blockchain scene in London is already dominated by the financial sector, but due to university courses and other thriving markets, has broader reach. Monolith’s Mel Gelderman points out that London’s position as a global leader in FinTech helped attract attention towards blockchain and the subsequent decentralised finance (DeFi) space. ‘Good universities and an interest in finance means that there is plenty of talent and funding to go around, even though startups aren’t as prevalent as in places like Berlin’. He also points out that there is an active Ethereum community which resulted in sprouting DeFi projects in the city.


Pioneer in regulations and crypto currency tax, but very little startup presence

Also known as Blockchain Island, Malta has pushed to be a major player in blockchain, both for companies and innovation. Malta’s blockchain frameworks, which although not legally binding, came on to the scene very early on, giving companies some level of guidance and certainty, while still allowing the government to remain malleable in regulation. With relatively low taxes and EU Membership, Malta is situated at a very favourable place to register a company, and when factored in with the semi-lenient framework, has placed itself as a top country for registering blockchain startups. However, Alex Dreyfus, CEO of and Chiliz, says that ‘[w]hile Malta is a strong EU country with a proper regulatory framework for companies [in blockchain], it may be too small to build a proper ecosystem’.

The Netherlands

Some interesting initiatives, a decent fiscal situation for traders, but in need of better regulations to nurture startups

The Netherlands’ blockchain ecosystem is somewhat unique in that there is broad interest from the residents, potentially due to an initiative by the Dutch Blockchain Coalition to provide free blockchain courses. While the government is struggling to keep up with regulation and has deep concerns about predatory behaviour in the space, it has also backed innovation, supported pilot projects, and formed influential partnerships. Sebastiaan van der Lans, founder of, lists ‘Blockchain Netherlands Foundation, Dutch Blockchain Coalition, great ambassadors like Olivier Rikken and Marloes Pomp, [and the]Lisk Center Utrecht’, as some of the initiatives driving growth in the ecosystem. However, Bart Mol, Satoshi Radio’s Host, says that ‘the ecosystem is healthy, [but] not necessarily growing at the moment’. This is not entirely a bad thing though, as he continues that a ‘lot of startups are focusing on tech or applying blockchain tech. Not […] ico’s [Initial Coin Offerings]’, revealing a focus on bringing projects to fruition, rather than the beginning of a host of new projects.

Investments in AI/Blockchain

  • Investment for start-ups, early and growth stages

  • EUR 100 million (EU contribution in 2020)

  • With ambitious objectives:

    • Financing a portfolio of innovative AI/blockchain companies

    • Developing a dynamic EU-wide investors community

focusing on AI and Blockchain

    • Scaling up the volume of investments at the national level by involving the national promotional banks that are willing to participate

    • Incentivising further private sector investments

    • Making Europe more attractive for start-ups to stay and grow

Technical and legal challenges

  • Energy consumption

  • Scalability

  • Interoperability

  • Integration with existing IT systems and organisations

  • Smart contract resilience and legal enforceability

  • Framework for use of tokens incentivising users

  • Lack of complete EU regulatory framework / lack of clarity

    However, challenges remain…

    Though it’s clear the EU sees the potential of blockchain, its report warns that there are still challenges in building DLT solutions. It states that the idea of blockchain as a ‘one size fits all’ technology is incorrect. In other words, “challenges of deploying blockchain technology are strongly related to context, application or sectorial issues.”

    “That is why organisations should not develop solutions looking for problems, but instead should find existing or foreseeable problems in their operations or business, and then look for possible blockchain solutions,” the report continues.

    For instance, DLT in the public sector “is neither transformative or even disruptive […] as it is often portrayed.” This is due to complex integration with legacy systems, the need for centralization, and scalability.

    Perhaps this explains the report’s forecast of 10-15 years for profound blockchain impact, which is beyond many existing predictions. It considers the technology to be at the “embryonic stage” facing issues like power consumption and interoperability.

    However, with collaboration and open environments such as regulatory sandboxes, these issues can be overcome, the document explains: “Blockchain applications can have far-reaching implications at policy, economic, social, technical, legal or environmental level.”

    “Potential changes, for example, in economic and business models, governance mechanisms or trust between parties, can only be grasped through a mix of different areas of knowledge, including computer science, economics, law, public finance, environmental sciences, and social and political sciences,” the report concludes.

    The report was presented at the OECD Blockchain Forum on Friday ahead of its official launch in October, the report is now available online. A team of 14 academics at the Joint Research Centre (JRC) wrote the document. ‘Blockchain Now and Tomorrow’ can be seen as a sign of the EU’s recognition of the importance of DLT. Indeed, “The growth and increasing attention to blockchain technology has not gone unnoticed at EU policy level,” the report reads.



Lefgal framework