EU Commission seeks automated Ethereum DeFi monitoring

Quick Take

  • The European Commission put out a tender for a study on how to monitor the Ethereum network through “embedded supervision.”
  • The pilot would automate DeFi data collection for regulators in real-time.
  • Applications to participate in the program are open until December 1.

The European Commission released a bid to study the possibilities of monitoring decentralized finance through “embedded supervision” last week. 

Stemming from the Commission’s Directorate-General dedicated to finance and markets, the proposal sets out to investigate how financial supervisors could regulate Ethereum — which it sees as the biggest payment settlement platform for DeFi. 

The pilot program would go on for a minimum of six months and is estimated at a value of €250,000 (approximately $242,500). Applications to participate remain open until December 1.


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Lawmakers in the Commission recognize that DeFi and Ethereum’s open-source nature is a vantage point for regulatory watchdogs to follow protocol activity. The study will focus on “automated supervisory data gathering directly from the blockchain to test the technological capabilities for supervisory monitoring of real-time DeFi activity,” according to the Commission’s document.

Patrick Hansen, EU policy and strategy head at Circle, tweeted that the impact of the pilot could be significant as "the capability of regulatory bodies to automatically monitor compliance by reading public blockchain data could drastically reduce the need for market participants (e.g. DAOs) to actively collect, verify & deliver data to authorities.”

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