There is now no question that blockchain technology will change economic relationships. But what about sub-sectors such as the alternative financing industry or - more specifically - crowdfunding? This question was addressed by the 4th CrowdCamp of the European Crowdfunding Network (ECN) in June 2019 in Berlin. As a founding member of the ECN - Innovestment Managing Director Christin Friedrich is also the association's Chairwoman - we have of course followed the events and have some answers to them.
The quintessence of the event to begin with: The blockchain technology offers great opportunities for alternative forms of financing and thus also for the crowdfunding industry. It is backed by the EU. Keynote speaker Dr. Joachim Schwerin from the European Commission sees a logical development in the Fintech sector since the banking crisis, from crowdfunding to blockchain technology.
Much discussed vehicles of alternative financing at the event are Initial Coin Offerings (ICO) and Security Token Offerings (STO). While crowdfunding and crowdinvesting were given the legal framework to protect consumers from dubious capital investments with the introduction of the Small Investor Protection Act (Kleinanlegerschutzgesetz - KASG) in July 2015, the regulation of the new instruments is still unclear. Will the existing financial market regulation stand up to the demands of digitalisation? Or will completely new systems have to be developed? There is still a lot to be done in this area - on the part of the Federal Financial Supervisory Authority (BaFin) as well as the Federal Government and the Blockchain Federal Association.
Still interesting from the perspective of the crowdfunding platform: the reward principle. In reward-based crowdfunding, this has always been the basis, and blockchain technology is virtually predestined for incentives. Rewards, for example, for sustainability or environmental projects or generally as recognition for positive behaviour within the network can be programmed in from the outset. This results in new aspects for the sharing economy, which contributes to a more social coexistence through transactions and rewards.
The ECN working group "Exploring Blockchain for Alternative Finance" is currently working on a white paper that will incorporate the findings of the conference. We will keep you up to date on where the journey is headed!
Crowdfunding.de has published our summary of the event as a guest article. Read the detailed report here.
The European Crowdfunding Network has published a report on the use of DLT and blockchain for alternative financing during the global blockchain conference Convergence in Malaga. The findings of the conference have been incorporated into the work of the ECN working group "Exploring Blockchain for Alternative Finance". You can read the report here.
Then you might also be interested in our article "Crowdfunding takes important hurdle in EU harmonisation".