Blockchain Consortia: A legal roadmap to a dynamically changing regulatory landscape in the US and the EU

Various distinctions and categorizations of blockchains are used depending on the purpose of the technology. Generally, blockchains are divided into private (permissioned) and public (permission-less) networks. Probably the most known example of a public blockchain is bitcoin, a digital currency that over the last few years has drawn as much excitement as it has disappointment. While the public-at-large continues to seek to profit from trading bitcoin or other cryptocurrencies, companies around the world are attempting to utilize the technology itself to streamline their operations, cut costs, and attract new partners and reach new markets.

One manifestation of the latter type of effort is a so-called “blockchain consortium,” a business-to-business initiative that gathers market participants around a common challenge. In such a consortium, each participant contributes its resources to construct and govern a blockchain network. This joint-venture model, while it gives hope for broader utilization of blockchain, nevertheless raises concerns and legal risks that only escalate when consortia operate across geographical borders and legal jurisdictions.