EUBOF advises the EU on the integration of Blockchain and AI

Last updated: May 27, 2024 1:52 pm EDT | 2 minute read

The European Blockchain Observatory and Forum (EUBOF), an initiative of the European Commission, published a report on May 24 calling on the European Union (EU) to prepare for the integration of blockchain technology and artificial intelligence (TO THE). The EU’s latest blockchain move is seen as a proactive approach to protecting user data.

THE EU blockchain report, prepared by the Directorate-General for Communications Networks, Content and Technology, discussed the potential integration of blockchain technology with artificial intelligence. It highlights blockchain’s secure data storage and management capabilities, particularly in sensitive industries such as healthcare and finance.

EU Blockchain Report Highlights DeFi as Emerging Trends

The report focused on concept of decentralized artificial intelligence networks, which could put an end to the current centralized model dominated by large companies and governments. By taking advantage of the distributed nature of blockchain, these networks could encourage collaboration and innovation among a wider range of participants.

The EU blockchain report also explored emerging trends in web3, such as decentralized finance (DeFi) and smart contract improvements.

DeFi provides financial services without traditional intermediaries like banks and is seen as an industry where regulatory frameworks must be established to ensure consumer protection and financial stability.

The paper also discussed smart contracts, which are self-executing agreements stored on a blockchain. The report highlighted the need for advancements in smart contract capabilities to fully exploit their potential in various applications.

THE The proactive approach of the European Commission The integration between blockchain and artificial intelligence is considered strategic, especially in light of recent security incidents in the cryptocurrency sector.

Let’s remember that DeFi lending platform Sonne Finance has suffered a serious security breach on May 14, at a loss of approximately $20 million.

Likewise, Hundred Finance encountered a similar problem in 2023. With the Hundred Finance exploit, the hacker exploited a vulnerability by manipulating the exchange rate, inflating the value of collateral, and subsequently draining lending pools with only a minimal amount of tokens.

The philosopher warns against the unbridled integration of artificial intelligence in finance

Experts and regulators have expressed growing concerns about the potential implications of unbridled integration of AI technology into finance.

Famous philosopher Yuval Noah Harari spoke at the Bank for International Settlements (BIS) Innovation Summit on May 7, warning against the unbridled use of artificial intelligence in the financial sector. He warned of the risk that artificial intelligence could get out of control, leading to serious consequences effective regulation recommended to mitigate abuse and adverse events.

In January 2024, the Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy, along with the North American Securities Administrators Association and the Financial Industry Regulatory Authority, issued a joint alert warning investors about the rise of investment fraud involving artificial intelligence and other emerging technologies.

At the beginning of January, SEC Chairman Gary Gensler expressed concern on the potential impact of AI on financial systems by warning of AI washing, algorithm biases and more.

Experts believe that various global authorities will continue their efforts to mitigate AI risks. This includes ensuring that companies accurately represent their AI capabilities and the role of AI in their businesses.

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