The European Blockchain Initiative explained, with Peteris Zilgalvis

Interesting chat with P?teris Zilgalvis, Head of Unit, Digital Innovation & Blockchain, Digital Single Market, DG CONNECT, Co-Chair, FinTech Task Force, European Commission

What is your own background briefly?

I’m a lawyer (Jurisprudence doctor, J.D. degree from the University of Southern California, California State Bar since 1990), Latvian citizen, working on environment and new technologies in Latvian ministries, private practice of the law, consulting, the World Bank, the Council of Europe, now the European Commission (Head of Unit, Digital Innovation and Blockchain; Co-Chair of the FinTech Task Force), and was also Visiting EU Fellow 2013-14 at St. Antony’s College, University of Oxford, and Associate, Political Economy of Financial Markets there.

Does it seem like a logical background to what you do now?

The thread leading through everything that I have done is law and the new technologies; first, environmental technologies, then biotechnology with the Rio Convention, and leading into digital technologies. My undergraduate university degree in political science was from UCLA, where the first e-mail was sent from on the ARPANET, what was to become the Internet.

How was the last 12 months? What were your big wins?

The European Blockchain Partnership of 29 European countries moving to the deployment of public sector use cases across borders on the European Blockchain Services Infrastructure (EBSI), in a regulatory sandbox framework where all the countries and the European Commission are learning how this emerging technology can fit in the existing legal framework while implementing the infrastructure.

Also in the Commission Communication: The SME strategy for a sustainable & digital Europe, it is stated, ‘The Commission will launch a blockchain-based initiative enabling issuance & trading of SME bonds across Europe, using the European Blockchain Services Infrastructure.’ This could be particularly useful in helping SMEs get access to finance after the current crisis is over.

What would you have done differently?

I think it has gone well. To be a bit self-critical, I could have wished to have more time to have a longer dialogue with each of the countries on their expectations and vision for the project, but all credit to them, their engagement and support for the EBSI has been superb and the progress is unique in the world in its cross border breadth and ambition.

1 min pitch for what you are doing now?

On the EU regulatory framework for crypto-assets, the public consultation, open until 19 March and the parallel consultation on digital operational resilience, are the first steps in preparing potential initiatives which the Commission is considering. We are very interested in receiving inputs from all stakeholders on crypto or digital assets, which is an area where we see interesting opportunities for innovative business models that could be based on tokenisation. At the same time, we want to ensure protection of consumers and investors, as the case may be.

Tell us more about the open call for SMEs and Startups to contribute to addressing Coronavirus?

It’s a European Innovation Council Accelerator call, The deadline for the cut-off will not change;   All applications will be treated equally;   Selected projects working on #COVID19 will be fast-tracked. Only for-profit companies (legal entities) can apply for #eicAccelerator funding. Application:

europa.eu/!CJ33UW

 Guidelines: europa.eu/!GG79Hn

 Company registration europa.eu/!Qj49Wn

 How to submit a proposal: europa.eu/!up73dK

 What is an SME: europa.eu/!vr33kP

What is the European Blockchain Initiative? And in particular the AI Blockchain Fund?

Thematic Investment Platform for AI and Blockchain

Investment Gap for AI and Blockchain technologies:Empirical data show that North America is currently dominating the AI market, with China making important progress and catching up fast. Europe seems to be in the danger of lagging behind in global markets, with investments focused with 15-$23 bn in North America, $8- $12bn in Asia and only 3-4 bn in Europe.

The Thematic Investment Platform for AI/Blockchain (TIP) aims at providing access to finance, in particular in the form of equity, to innovative and higher risk AI and blockchain companies.

• AI and Blockchain are emerging markets in Europe. The investment platform aims to support the further development of these markets;
• The Investment platform will provide improved dedicated financial support to innovative SMEs and midcaps at all stages of their development (early stage and scale-up phases);
• In the first phase the TIP aims to focus on Equity products, since most AI and Blockchain companies are either early stage or high-growth companies

• In a second phase the Platform aims to add quasi-equity and debt financing
• Data indicate that investments in AI and Blockchain are focused on a few geographic hubs, in particular London, Paris and Berlin;
• A European Initiative is key to broaden the geographic reach of the existing investments (EU- 13 Member States);
The proposed approach is to implement the investment platform as part of a broader Digital AI and Blockchain Investment Initiative that promotes the uptake and scale-up of AI and blockchain innovations in Europe.

The platform will focus on increasing the investments in AI and blockchain innovations and to provide a set of enabling services to mobilise AI& blockchain innovators (high-tech SMEs, start-ups and the R&I community); [potential] investors and actors that should uptake AI/blockchain innovations and solutions. A key objective is to leverage public resources incentivizing private sector investments.

The initiative will be implemented through a phase approach focus on the following specific activities:

Investment scheme and investment platform

(i)  a dedicated thematic pilot investment scheme for AI and Blockchain was developed. through a partnership between the European Commission and EIF/EIB with financial contributions from EFSI and H2020/Innovfinon the EC side. For the early stage phase an investment scheme of €100 million will be set up that would leverage further investments from National Promotional Banks and VC funds. It is estimated that the total investment volume will reach €300-400 million

(ii)  to implement an Investment Support programmewhich will develop partnerships with Member States to realise the following activities:  i) raise awareness among multiple stakeholders about the importance to increase investments in AI/blockchain innovations; ii) carry out a series of market consultations with a broad range of stakeholders from governments, the private sector and investors ii) develop partnerships with Member States, National Promotional Banks and international partners;

iii) support the portfolio development of technically and financially viable projects; and (iv) organize a AI/Blockchain Investment Summit that will facilitate the match-making between project promoters, innovative SMEs, start-ups and private investors.

(iv) develop investment platform through the InvestEUprogram and a larger partnership (or possibly multiple partnerships) with EC services, Member States, notably through National Promotional Banks,  and possibly other public and private financial institutions.

The platform would include the development of key enabling services, such as (i) provision of advisory services to enhance the investment readiness of AI/Blockchain SMEs and companies; (ii) support the portfolio development and (iii) organise investor forums, match making events between innovators and investors; market consultations and other community building events.

Why do you think it is such a powerful idea?

Access to finance is an important part of implementing innovation, actually realising the idea, putting it on the market and sustainably providing the product to the market. For emerging technologies like AI and Blockchain, it has often been even more difficult to access early stage risk capital, and we want to give these promising EU startups a hand.

How can people find out more about you personally & your work?

You can find us at https://ec.europa.eu/digital-single-market/en/content/digital-innovation-and-blockchain-unit-f3 you can follow me @PZilgalvis on Twitter, on LinkedIn, Facebook and Instagram.

Who and where do you get inspiration from?

Literature and history books in English, Latvian and French; art nouveau architecture, particularly in R?ga; music – classical, folklore and popular; my family; nature, both to appreciate in its own right, but also oceans for waves to surf on, mountains for snow to snowboard on, and forests and beaches for running.

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