Europe Is a Leader in Blockchain AdoptionEurope has so far outpaced the U.S. and Asia in adopting the disruptive distributed ledger technology.

These days, blockchain technology is spreading like a virus. Throughout the year 2018, thedemand for industry-specific professionalshas been rising in an unbelievably swift manner. Thenumber of active Bitcoin minersis in an endless upward spiral and dozens of theworld's largest companiesare getting their feet wet while preparing to dive deep into the space -- all regardless of the recent market downturn.

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The world of digital decentralization is booming like never before. In order to be well prepared for this cryptographic revolution,22 European nations formed a partnershipto exchange blockchain related experiences in April this year. During the past few decades, U.S.-based companies often eclipsed European firms with ease, in regard to technology adoption. This time, it could be Europe's turn to take the globalleadership.

Financial systems

As of 2017, almost every bank in the world was interested in implementing blockchain technology. Recent developments have shown that this curiosity is not only based on theoretical considerations, but has already been adapted into practice. On July 3, the blockchain platform We.Trade, managed by IBM, conductedthe first real-time customer transactionsbetween several big European banking institutions.

Apart from We.Trade participants Santander, UniCredit and Deutsche Bank, there are also a handful of other European banks, like UBS and ING, that are currently engaging in variousinternational blockchain consortia, all of which aim to evolve the $10 trillion tradefinanceindustry. In detail, the assembles are exploring the potentials of distributed ledger technology, in order to minimize fraud cases, accounting efforts and document turnaround times. Furthermore, some agendas also include delving into smart contracts, which could enormously enhance cross border trading and potentially revamp the supply chain industry.

However, banks are not the only financial entities that have shown interest in getting their piece of the pie. As stated by diverse industry experts, like University of Oregon professor Stephen McKeon, security tokens are likely todisrupt venture capitalin the very near future. These digital units can represent ownership in any type of financial asset, most commonly stocks and bonds. European stock markets appear to be particularly interested in building exchanges for tokenized securities. The main stock exchanges of Malta, Gibraltar and Switzerland previously announced to be working on their very own security token exchanges, whereas overseas stock markets mostly remain temperate so far.

Related:Entrepreneurs Are Flocking to Europe to Open Cryptocurrency Businesses

Insurance

While insurance have been around for multiple centuries, the industry has often failed to incorporate recent technological advancements into their daily business. This time, it appears that representatives of the business are trying to establish themselves as pioneers of blockchain technology. In November 2017, the German corporation Allianz, one of the world's biggest insurance companies, revealed it successfully developeda prototype for the captive insurance marketthat is powered by blockchain technology. Less than 10 months later, Allianz announced it wastesting a native cryptocurrencycalled "Allianz token," which will be used to movemoneyinternally.

Due to its obligatory transparency, reliability and also more advanced techniques like smart contracts, the cutting edge technology perfectly fits the needs of the insurance business. Other major players outside of Europe, such as the People's Insurance Company of China and MetLife, are also running various tests that include automated payments when the terms of a claim are met.

Still,recent research by S&P Global Market Intelligenceconcluded that European insurers trump their Asian and U.S.-based competitors by far. According to the study, almost 50 percent of all insurance behemoths that are publicly talking about distributed ledger technology are residing on the European continent -- in spite of the higher number of U.S. firms.

Related:Switzerland's 'Crypto Valley' Presents Real Opportunities for Blockchain Entrepreneurs

Currency

In July 2018, the European Parliament's policy department for economic, scientific and quality of life policies released areportconcerning competition issues in the area of financial technology. The report mentioned cryptocurrencies could potentially disrupt the entire finance sector and perhaps even replace traditional fiat currencies. While the report sheds light on a potential digital currency as an extension to the euro, it also indicates no interest in a native cryptographic currency.

然而,欧洲央行明确表示that it is currently not working on a digital euro. In anopen letter to a member of the European Parliamenton Sept. 12, ECB president Mario Draghi explained that "the technologies which could potentially be used to issue a central bank digital currency [...] have not yet been thoroughly tested and require substantial further development before they could be used in a central bank context."

The world outside of the euro looks different. Sweden, for example, isworking on the "e-krona,"which is based on the popular cryptocurrency IOTA and planned to be an official medium of exchange. Switzerland can be considered another prime example for blockchain adoption in Europe, as the country provides unique blockchain-friendly legislation and occasionallyaccepts Bitcoin for official payments.

Related:Thanks to Blockchain Technology, the Entrepreneurial Spirit in France Has Never Been Stronger

What the future holds

Studies from mid-2017显示,欧洲和亚洲的全球lead on blockchain innovation and, so far, it seems like Europe has managed to defend its leading position throughout the past 16 months. A survey by the Netherland-based bank ING recently disclosed thatEuropeans are generally more interestedin cryptocurrencies than U.S. citizens. However, regardless of the recent advancements, there are still several hurdles to clear before distributed ledgers reach a truly big share of all companies.

Christopher Pissarides, Economic Nobel Prize laureate of 2010, believes that asset-backed stablecoins could strongly accelerate the adoption of cryptocurrencies as a form of payment. Pissarides, who is working on a diamond-backed cryptocurrency with his project Hello Diamonds, told me in an interview that "blockchain technology has the potential to disrupt the current financial system, but it is still mainly used for speculation. If we can eliminate the volatility and bring in stability, we now have the financial tool necessary to replace the archaic payment systems in place today."