Highlights of Collaborations in 2022
The IOTA Foundation is a founding member of the International Association for Trusted Blockchain Applications (INATBA). With a constant flow of new activities and outputs as well as increased public appearance, it can be difficult to keep track of everything that IOTA Foundation members have been up to lately as part of their work with the association. This blog post recaps some of the highlights of our work with INATBA during 2022.
2022 delivered several challenges to the blockchain industry, notably the crypto crash and regulatory challenges in the form of the EU’s Transfer of Funds regulation. That’s why the work of the International Association for Trusted Blockchain Applications (INATBA) is important: it brings together DLT developers and users with policymakers and regulators to work together on developing the technology and spreading its adoption.
Founded in Brussels in 2019, INATBA connects policymakers and regulators with developers and users of DLT to evolve the technology and promote the global adoption of blockchain. Among its 170 member organizations is the IOTA Foundation, a founding member.
The IOTA Foundation also participates in several of INATBA’s Working Groups, which represent areas in which INATBA promotes the adoption of blockchain. These include the Social Impact & Sustainability Working Group (SISWG), the Privacy Working Group (PWG), and the Finance Working Group (FWG).
2022 was a very busy year for our colleagues working with INATBA, and 2023 promises to be even busier – let’s have a quick recap of some of the highlights.
IOTA and SISWG
The Social Impact and Sustainability Working Group (SISWG) had a particularly busy year, working on a definition of social impact for blockchain projects, a framework for social impact measurement, two important publications, and participation in a major new UN initiative.
Under the leadership of IOTA’s Senior Regulatory Affairs Expert Mariana de la Roche, the SISWG dedicated most of its efforts to the challenges and opportunities facing blockchain projects working on social impact. This work started with the report Blockchain for Social Impact, published in 2021.
Featuring several of the IOTA Foundation’s partner projects, the report found a lack of a standardized definition of social impact among its surveyed projects, as well as difficulties experienced by small and medium-sized projects when trying to showcase the social impact of their actions.
Why do we need a standardized definition of social impact? Without an agreed definition and set of measurements, blockchain projects and organizations working on social issues are hampered in their ability to align and generate greater social impact together. A lack of definition also makes it difficult for organizations that need to measure and report their social impact for purposes like raising funds or attracting stakeholders.
To solve this challenge, the SISWG published the Unified Definition of Social Impact for the Blockchain Sector in December. It defines social impact as
Any intentional or unintentional measurable outcome from actions implemented (or as a result of those actions) by individuals in the private or the public sector that affect the cultural and socio-economic environment of other individuals and communities in a positive way”.
- A framework for social impact measurement
Although several frameworks for organizations and companies to monitor their social impact exist, most of them aren’t feasible for small and medium-sized projects as they often are complex and demand more capacity and resources than such projects can allocate. The SISWG decided to address this challenge with a social impact model to guide blockchain projects in measuring the social impact of their work.
To create the model, the SISWG reviewed academic literature on the most popular social impact frameworks and broke them down into steps, choosing the most relevant for smaller companies based on factors such as funds required to access the model and level of complexity. The resulting Social Impact Model for Small and Medium-Size Blockchain Projects was also published in December and consists of 46 steps to take into consideration to assess the social impact of a project from initiation to evaluation.
Due to their leading role in the SISWG, Mariana de la Roche, Åsa Dahlborn, and Laura Kajtazi from the IOTA Foundation played an important role in the lead-up to the publication of both these documents. Moreover, at the INATBA Gala hosted in Brussels on 31 January 2023, Mariana and Laura were awarded by INATBA’s board of directors for the leadership of the working group and top contributors respectively. At the gala, two IOTA community projects were among the shortlisted nominees for the most exciting industry project (SPYCE.5) and the most exciting Regenerative Finance project (IOTAOrigin).
The IOTA Foundation was also a driving force in the creation of INATBA’s Crypto Guide for Non-Profits and NGOs, published in April 2022.
Accepting investments or donations in crypto and digital assets opens the door to a world of opportunities for social impact organizations looking for funds. However, many social businesses, non-profits, and NGOs lack crypto experience and an understanding of the benefits and risks. Therefore, the SISWG created the guide to share the fundamental facts for accepting and holding crypto in a non-profit context.
- Blockchain for Climate Applications
Another important SISWG publication in 2022 was the Blockchain and the Climate Adaptation Imperative report, which included contributions from Mariana. The report calls for structured collaboration between the blockchain community, governments, communities, and climate-vulnerable businesses to develop an environment in which blockchain applications can support aspects of adaptation to climate change. Initiated by the Resilience and Adaptation sub-group under the Climate Action Working Group, the report was published under the SISWG due to the merger of the Working Groups in 2022.
In September 2022, INATBA joined the UN’s Blockchain for the UN Charter Values and the SDGs Action Plan 100+ (BC100+) as a steering committee member – an action driven by the SISWG under the IOTA Foundation’s Mariana de la Roche and Laura Kajtazi.
This global initiative under the High Patronage of H.E. Csaba Körösi, President of the 77th UN General Assembly, brings together over 100 networks and platforms to envisage a “blockchain for social good and sustainability ecosystem” and understand how it can support the achievement of the UN’s Agenda 2030 and the Sustainable Development Goals (SDGs).
The main goal of BC100+ is to raise awareness about the potential of blockchain for social impact and sustainability. The initiative explores the potential of blockchain technology to address systemic issues such as inequality, poverty and climate change by rebuilding trust, empowering communities, asserting accountabilities, and re-distributing value on the global level. Currently, BC100+ is putting together a manifesto with the vision of the collective and soon it will be shared with partners to sign so they can join the movement.
Events and publications
During 2022, the SISWG also spread awareness of the potential of blockchain to tackle social issues and achieve the SDGs by participating in events and contributing to publications. The events, several of which featured the Working Group’s IOTA members, were organized by either SISWG or INATBA itself and focused on promoting the following:
In November, INATBA organized its Digital Blockchain Week, which included panel discussions on different topics relevant to the blockchain space. INATBA members from the IOTA Foundation took part in two panels: Privacy vs Compliance Conundrum: What Can We Expect?; and Blockchain and the Agenda 2030: Leaving No-one Behind.
Finally, members of the SISWG presented their work of the Working Group at the following external events:
Mariana de la Roche and Åsa Dahlborn contributed to the report Blockchain for Supply Chain Transparency, published by the EU Blockchain Observatory and Forum on 18 October 2022. They shared insights from the work of the SISWG and provided examples of how blockchain can be used to promote transparency in supply chains.
Additionally, the SISWG was recognized in the Staff Working Document on the Digital Energy EU Action Plan published in October 2022 by the European Commission, which stated:
It appears necessary to develop technical tools to assess the electricity consumption and carbon footprint of crypto mining at international level. International cooperation with standardisation bodies could provide the technical expertise needed to develop energy-efficient labelling for blockchains. International collaboration with standardisation bodies would put the EU at the forefront of any future global initiative to encourage sustainable blockchain technologies. This incentive should encourage the use of the more environmentally friendly consensus mechanisms and applications of blockchain technology, taking due account of other relevant aspects such as cybersecurity and financial and social impacts. This would need to be accompanied by awareness-raising measures in relevant settings (e.g. the Social Impact and Sustainability Working Group of the International Association of Trusted Blockchain Applications (INATBA).”
IOTA and the Finance Working Group
INATBA’s Finance Working Group (FWG) also benefited from the involvement of Anja Raden, Director of Legal and Regulatory Affairs, and Tom Jansson, Head of Legal and Regulatory Affairs at the IOTA Foundation.
As part of the FWG, IOTA Foundation co-authored a series of papers to share industry knowledge and discuss the future regulation of Decentralized Finance, Decentralized Autonomous Organisations, andNon-Fungible Tokens as well as the need for crypto-asset regulatory sandboxes.
The IOTA Foundation was also involved in providing feedback to the European Commission’s Anti-Money Laundering Package (AMLR & Travel Rule – Initial Response) and Transfer of Funds Regulation (TOFR) – INATBA Second Response with Amendment Suggestions
Furthermore, the IOTA Foundation took part in the FWG’s efforts to develop a series of recommendations presented to the European Commission regarding the Markets in Crypto Assets (MiCA) regulation. We are proud to say that most of the recommendations (for example, to update and clarify definitions) were incorporated into the final version.
IOTA and the Privacy Working Group
Members of the Privacy Working Group, including IOTA Foundation’s Legal Counsel and Data Protection Officer, Maitén Vilches, co-authored the 2021–2022 edition of the Report on Data Privacy Regulations in the Blockchain Ecosystem, released in May 2022. In the report, the Working Group sourced information on how regulations from different jurisdictions affect the use of blockchain technology with regard to data protection and privacy. At INATBA’s Digital Blockchain Week, Maitén was also present in ‘The Privacy vs Compliance Conundrum: What Can We Expect?’, an online roundtable where the authors of the report and other experts from around the world convened to evaluate, share, and compare different challenges in this area and possible blockchain-based solutions.
Looking ahead to INATBA in 2023
The IOTA Foundation’s INATBA members look forward to the rest of 2023, which is expected to be at least as busy as 2022. To date, the work plan of the SISWG for this year is focused on activities in line with the BC100+ initiative and participation in events promoting blockchain for social impact and sustainability, as well as other activities that bring awareness to these topics.
For 2023, the SISWG plans two completely new activities: a report on Latin American initiatives that address the SDGs with blockchain projects, and a podcast series with blockchain projects working on financial inclusion in different regions.
The Finance Working Group will continue its work on providing feedback to the European Commission regarding the update of the Directive on Administrative Cooperation (DAC8), the new AML Regulation, and several initiatives regarding Web3.
Moreover, the IOTA Foundation is joining the Identity Working Group to support amongst others the actions of the Digital Credentials Task Force, which was launched last year as a result of a report on Digital Credentials and Self-Sovereign Identity produced by the Governmental Advisory Body workstream led by the Government of Canada.
Through the Digital Credentials Task Force, IOTA Foundation aims to contribute to the promotion of interoperability and mutual support for digital credentials across borders.