European data watchdog issues blockchain processing guidelines

The European Data Protection Board published comprehensive guidelines on blockchain technology processing on April 8, 2025, establishing strict data protection requirements for organizations using distributed ledger technologies. The Guidelines 02/2025 on processing of personal data through blockchain technologies address the complex relationship between blockchain's core immutability features and GDPR compliance obligations.

According to the EDPB documentation, "the distributed nature of blockchain and the complex mathematical concepts involved imply a high degree of complexity and uncertainty that leads to specific challenges with respect to the processing of personal data." The guidelines emphasize that storing personal data on blockchain should be avoided when it conflicts with data protection principles.

Summary

Who: The European Data Protection Board issued comprehensive guidelines affecting organizations using blockchain technology for personal data processing, including marketing technology providers, financial services, and any businesses implementing distributed ledger systems across the European Economic Area.

What: Guidelines 02/2025 establish strict technical and organizational requirements for blockchain data processing, including restrictions on storing personal data on-chain, mandatory data protection impact assessments, and specific compliance measures for different blockchain architectures while addressing controller responsibilities in decentralized environments.

When: The guidelines were adopted on April 8, 2025, as Version 1.1 following public consultation, representing the first comprehensive regulatory framework addressing blockchain technology's intersection with European data protection law since GDPR implementation in 2018.

Where: The requirements apply across the European Economic Area and extraterritorially to organizations processing personal data of EU residents through blockchain systems, regardless of where blockchain nodes are physically located, with particular implications for international data transfer compliance.

Why: According to the EDPB, blockchain technology creates "specific non-compliance risks and risks for the rights and freedoms of natural persons" due to immutability features that conflict with GDPR principles, requiring detailed guidance to ensure fundamental data protection rights while enabling responsible blockchain innovation across business sectors.

Technical requirements create compliance challenges

The 25-page document details technical obstacles organizations face when implementing blockchain systems containing personal data. Once transactions are recorded on the blockchain, "it cannot individually be altered or removed without being detected as an inconsistency in the chain," according to the guidelines. This immutability conflicts with GDPR requirements for data modification and deletion.

The EDPB distinguished between different blockchain architectures and their data protection implications. Public permissionless blockchains like Bitcoin and Ethereum pose greater compliance risks than private permissioned systems. According to the guidelines, organizations should favor permissioned blockchains because they offer clearer allocation of responsibilities.

The document addresses three primary methods for mitigating data protection risks when personal data must be stored on blockchain systems. Encryption of personal data allows access only to those with appropriate keys, though the EDPB warns that "even state-of-the-art encryption perfectly implemented will be overtaken by time if the blockchain is retained indefinitely."

Hashing provides another approach by storing only salted or keyed hashes of personal data on the blockchain. The original data remains off-chain with appropriate security measures. However, the guidelines note that "the use of unsalted or unkeyed hashes should, in general, not be considered sufficient to guarantee the necessary level of confidentiality protection."

Controller responsibilities in decentralized environments

The guidelines address complex questions about data controller responsibilities in decentralized blockchain networks. According to the document, "neither this fact nor the selection of a particular technical infrastructure can be used as a reason not to comply with the GDPR." The EDPB requires careful assessment of roles and responsibilities for each processing activity.

In public permissionless blockchain systems, nodes may qualify as controllers or joint controllers when they exercise decisive influence over processing purposes and means. The guidelines state that "nodes may either individually exercise a decisive influence on the subset of transactions to be added to the next block they mine, or as a group by jointly agreeing on modifications of the protocols."

The EDPB strongly encourages establishing consortiums or legal entities among nodes to clarify controller responsibilities. Such arrangements provide clearer accountability frameworks that are "a key element for the protection of data subjects."

Data subject rights implementation requires design considerations

The guidelines emphasize that data subject rights must be complied with by design in blockchain systems. The right to erasure presents particular challenges since "it might be technically impracticable to grant the request for actual deletion made by a data subject when personal data is stored directly on a blockchain."

Organizations must ensure personal data can be effectively rendered anonymous if erasure requests are received. According to the guidelines, this requires that "the relevant transaction data stored on the blockchain does not allow the direct identification of the data subject and that any additional (off-chain) data which would allow for indirect identification is erased."

The document recommends against storing personal data directly on blockchain systems unless strong integrity properties are genuinely needed for specific processing purposes. When personal data storage is necessary, organizations should use techniques that primarily function as proof of existence rather than storing identifying information directly.

Risk assessment and impact evaluation requirements

The EDPB mandates Data Protection Impact Assessments for blockchain processing activities likely to result in high risk to individual rights and freedoms. According to the guidelines, organizations must conduct comprehensive risk assessments covering "the processing as a whole, including the blockchain-related risks."

Sources of risk extend beyond data storage to encompass "communication of transactions and blocks among different stakeholders, the gathering and storage of transactions awaiting validation for block creation, the management of blocks in dead-end branches, and the off-chain storage of personal data related to in-chain identifiers."

The guidelines require evaluation of whether blockchain technology is necessary for specific processing purposes. Controllers must analyze "whether the use of a blockchain will allow them to comply with data protection law," particularly regarding data minimization, storage limitation, and effective exercise of rights like erasure and rectification.

International transfer complications in global networks

Blockchain technology often involves international data transfers when nodes operate outside the European Economic Area. The guidelines note that "blockchain technology will often involve international data transfer, in particular when information are shared across nodes that are based outside of the UE."

These transfers must comply with Chapter V GDPR requirements even when nodes are not necessarily chosen or vetted, as occurs in public blockchain systems. Controllers should incorporate standard contractual clauses into contracts signed before accepting nodes, according to the recommendations.

The document emphasizes that ensuring proper application of data transfer requirements should be addressed from the design phase of blockchain activities. Privacy by design architectures may help assess compliance obligations for international data flows.

Marketing sector implications grow with enforcement trends

The blockchain guidelines arrive amid increasing regulatory scrutiny of data protection practices across European jurisdictions. German data protection authorities established unified fine procedures in June 2025, aiming to standardize GDPR enforcement approaches that could affect blockchain implementations in marketing technology.

Recent enforcement actions demonstrate growing regulatory attention to technical compliance measures. French authorities proposed stricter email tracking consent rules that require explicit consent for marketing tracking activities, establishing precedent for technical data protection requirements.

The marketing community faces particular challenges as blockchain adoption grows in advertising technology, customer data platforms, and loyalty programs. Privacy expert Pia T., Senior advisor in dataprotection, infosec, cybersec, and privacy enhancement, expressed concerns about blockchain implementations for age verification systems, stating "I say NO, bad idea! Im asking for zero knowledge and privacy by design." She highlighted multiple risks including that "data on blockchain are immuteable and cannot be deleted" and warned about "phishing, man in the middle attack" vulnerabilities.

Analysis of GDPR enforcement data shows only 1.3% of cases resulted in fines between 2018-2023, though standardized procedures may increase enforcement consistency.

Organizations implementing blockchain-based marketing solutions must evaluate data protection compliance against these detailed technical requirements. The guidelines' emphasis on data minimization and storage limitation principles directly affects marketing practices involving large-scale data retention and cross-border data flows.

The European Data Protection Board's detailed technical framework represents the most comprehensive guidance published to date for blockchain data protection compliance. Organizations processing personal data through blockchain systems must now evaluate their practices against these requirements while preparing for enhanced regulatory scrutiny across European jurisdictions.

Marketing Technology Terms Explained

Distributed Ledger Technologies (DLT): According to the EDPB guidelines, DLT represents a broader category of technologies that includes blockchain, implementing "a distributed and consistent database without centralised management." For marketing professionals, this technology enables transparent record-keeping for advertising transactions, campaign attribution, and customer data verification without requiring traditional intermediaries like banks or centralized platforms.

Permissionless vs Permissioned Blockchains: The guidelines distinguish between public permissionless blockchains where "anyone can read, write, or create blocks" and permissioned systems that "include an authority that must give permission to participate." Marketing applications typically benefit from permissioned architectures that provide clearer data controller responsibilities and reduced compliance risks for customer data processing.

Smart Contracts: These represent "programmable transactions or even more generic programs" that automatically execute when predetermined conditions are met, according to the guidelines. In marketing contexts, smart contracts can automate influencer payments, affiliate commissions, and programmatic advertising transactions while maintaining transparent, tamper-proof records of campaign performance and payment obligations.

Data Minimization Principle: The EDPB emphasizes this core GDPR requirement mandating that "only data which is necessary data to achieve the purpose may be processed in a blockchain." For marketing teams, this means collecting only essential customer information for specific campaigns rather than comprehensive data harvesting, particularly crucial when blockchain's immutable nature makes data deletion technically challenging.

Pseudonymisation: According to the guidelines, this involves "processing of personal data in a manner preventing attribution to specific individuals without additional information kept separately under strict technical controls." Marketing applications use pseudonymisation to analyze customer behavior patterns and campaign effectiveness while protecting individual privacy through techniques like hashed customer identifiers and encrypted preference data.

Joint Controllership: The framework establishes that multiple parties can be "jointly responsible for determining the purposes and means of processing personal data." In marketing ecosystems involving blockchain, this affects partnerships between brands, agencies, and technology providers, requiring clear contractual agreements about data protection responsibilities and compliance obligations across the entire customer data processing chain.

Cross-border Data Transfers: The guidelines address how "blockchain technology will often involve international data transfer, in particular when information are shared across nodes that are based outside of the UE." Marketing organizations operating globally must implement additional safeguards like standard contractual clauses when blockchain nodes process customer data across jurisdictions with different privacy regulations.

Data Protection Impact Assessment (DPIA): According to the EDPB, organizations must conduct comprehensive risk evaluations "prior to implementing a processing using blockchain technology." Marketing teams launching blockchain-based loyalty programs, customer verification systems, or decentralized advertising platforms must assess potential privacy risks and implement appropriate technical safeguards before deployment.

Zero-Knowledge Proofs: While mentioned in industry discussions, these cryptographic methods allow verification of information without revealing the underlying data itself. Marketing applications include age verification systems that confirm customer eligibility for certain products without storing or transmitting birthdates, and identity verification for premium services without exposing personal identification details.

Privacy by Design: The guidelines mandate implementing data protection measures "at the time of the determination of the means for processing and at the time of the processing itself." For marketing technology development, this requires building privacy protections into customer data platforms, analytics systems, and advertising tools from initial design phases rather than adding compliance features retroactively.

Timeline

• April 8, 2025: European Data Protection Board adopts Guidelines 02/2025 on processing of personal data through blockchain technologies
• June 2025: German data protection authorities establish unified fine procedures for standardized GDPR enforcement
• June 2025: French authorities propose stricter email tracking consent rules affecting marketing technology compliance
• May 2025: Dutch Data Protection Authority publishes GDPR preconditions for generative AI, expanding technical compliance frameworks
• January 2025: EDPB releases updated pseudonymisation guidelines establishing technical data protection standards