The US and China are “laundering” Europeans’ personal data likely stems from concerns about foreign apps bypassing EU privacy laws, as highlighted in a 2025 study by Incogni.
The study suggests that major US and Chinese platforms systematically collect and process sensitive data from European citizens, exploiting regulatory gray areas despite the EU’s stringent General Data Protection Regulation (GDPR). This isn’t “laundering” in the criminal sense but refers to practices where data is harvested, shared, or sold in ways that may violate privacy standards, often without transparency.
For instance, US social media apps are subject to government surveillance, and similar practices are assumed in China, undermining GDPR’s protections. Blockchain is proposed as a potential solution due to its decentralized and transparent nature. It could enable secure, user-controlled data management, reducing reliance on centralized platforms prone to misuse.
For example, blockchain-based systems like China’s RealDID use cryptographic keys for real-name verification without exposing personal details like phone numbers, aiming to curb data leaks. Similarly, the EU’s Blockchain Sandbox and EUROPEUM-EDIC initiatives explore blockchain for GDPR-compliant data protection and digital identity frameworks.
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However, blockchain’s pseudonymous nature clashes with GDPR’s requirements for data erasure and minimization, as public ledgers are immutable and often transparent. Strong pseudonymization or off-chain storage solutions, like zero-knowledge proofs, could address this, but reconciling GDPR with blockchain’s design remains complex.
Additionally, blockchain’s use in anti-money laundering (AML) shows its traceability can aid law enforcement, yet this same transparency could conflict with privacy goals if not carefully implemented. The catch is that blockchain isn’t a silver bullet.
Building Web3 solutions is an uphill battle—privacy regulations are tightening globally, and integrating blockchain with laws like GDPR or China’s PIPL requires overcoming technical and legal hurdles. Plus, centralized control in systems like China’s RealDID undermines blockchain’s decentralized ethos, raising questions about trust and government access.
If US and Chinese platforms exploit GDPR loopholes, Europeans may lose confidence in digital services, reducing engagement with global apps and platforms. This could fragment the internet, pushing users toward region-specific services or decentralized alternatives.
The EU might tighten GDPR enforcement or introduce new laws targeting foreign data processors, increasing compliance costs for US and Chinese firms. This could spark trade tensions or retaliatory regulations, as seen in China’s PIPL mirroring GDPR’s stringency.
US surveillance programs (e.g., PRISM) and China’s state-controlled data systems highlight conflicting priorities. Europeans’ data caught in these systems risks exposure to government overreach, undermining GDPR’s protections and fueling calls for data sovereignty.
Blockchain could empower users by giving them control over their data via decentralized identities or encrypted wallets. For instance, systems like RealDID show how blockchain can limit data exposure. However, its immutability clashes with GDPR’s “right to be forgotten,” and public ledgers could expose data if not properly pseudonymized. Adoption hinges on resolving these conflicts.
Stricter data regulations could stifle innovation for smaller firms unable to afford compliance, while blockchain solutions might democratize data control, fostering new privacy-focused startups. However, scaling blockchain for mass adoption is costly and energy-intensive, potentially limiting its impact.
If blockchain gains traction for secure data management, it could reduce reliance on US and Chinese platforms, reshaping global tech dominance. Yet, state-backed systems like China’s BSN blockchain could centralize control, countering decentralization’s benefits and creating new power imbalances.
Increased awareness of data misuse might drive demand for privacy-focused tools, boosting blockchain-based platforms like decentralized social networks. But complexity and user inertia could slow adoption, leaving centralized platforms dominant.
Unchecked data practices could deepen mistrust and regulatory divides, while blockchain offers a path to user empowerment but faces technical and legal hurdles. The outcome depends on how governments, tech firms, and users navigate this evolving landscape.