EU’s Controversial Smart Contract Kill-Switch Rules Finalized by Negotiators

CoinDesk
CoinDesk

28 Jun 2023 5:22 AM

Lawmakers and governments have reached a deal on the Data Act despite protests from the blockchain industry....

  • Legislative negotiators from the European Union have agreed on new rules known as the Data Act, which is part of a wider overhaul of data rules governing internet-connected appliances.
  • The provisions on smart contracts in the Data Act have raised concerns in the Web3 sector due to their vague scope and potential impact on decentralized transactions governed by immutable code.
  • The European Commission's Thierry Breton confirmed the deal, stating that it is a milestone in reshaping the digital space and will lead to a thriving data economy.
  • The text on smart contracts in the Data Act has been tightened up from the original plans, focusing specifically on the execution of contractual clauses in the context of data sharing.
  • The final agreed version of the law still refers to "smart contracts," which has raised concerns about its compatibility with public, permissionless blockchains.
  • Organizations linked to various blockchains have expressed concerns that the Data Act could conflict with the recently agreed Markets in Crypto Assets (MiCA) regulation.
  • The European Parliament and Council must vote in favor of the text agreed by negotiators for the Data Act to pass into law.

The sentiment towards the Data Act is mixed, with concerns raised by the Web3 sector about its potential impact on smart contracts and decentralized transactions. The European Commission, however, sees it as a milestone in reshaping the digital space and promoting a thriving data economy.

Go to publisher site

You May Ask

What are the new rules agreed upon by legislative negotiators from the European Union?Why have the provisions on smart contracts in the Data Act raised concerns in the Web3 sector?Who confirmed the deal on the Data Act and what is their perspective on its impact?How has the text on smart contracts in the Data Act been adjusted from the original plans?What concerns have been raised about the compatibility of the Data Act with public, permissionless blockchains?

Suggested Reads