EU watchdog says too soon for new blockchain rules

LONDON, Feb 7 (Reuters) - No specific European Union rules are needed to regulate blockchain for the time being given the sector's still limited reach, the bloc's securities watchdog said on Tuesday.

The conclusion from the European Securities and Markets Authority (ESMA) following a public consultation, is likely to be welcomed by the growing financial technology sector.

"At this stage, it is premature to fully assess the changes that the technology could bring and the regulatory response that may be needed, given that the technology is still evolving and practical applications are limited both in number and scope," ESMA said in a statement.

Blockchain, which first emerged as the system underpinning the cryptocurrency bitcoin, provides a shared record of transactions that is maintained by a network of computers, rather than a centralized authority.

Banks and stock exchanges are piling into the sector in the hope that using blockchain can cut costs. (Reporting by Huw Jones; Editing by Alexander Smith)