The European Parliament has recently approved a controversial Data Act that has raised concerns within the blockchain and cryptocurrency industry. The act, which sets out rules in various areas including smart contract development, has been met with mixed reactions from industry stakeholders.
The Data Act, which was adopted with 481 votes in favor and 31 votes against, with 71 abstaining votes, is now awaiting formal approval from the European Council to become law. One of the key areas of concern for the blockchain sector is the act’s essential requirements regarding smart contracts for data sharing as outlined in Article 30 of its text.
The controversy surrounding the Data Act stems from its potentially far-reaching requirements, particularly with regards to the development and deployment of smart contracts. One of the main points of contention is the act’s demand for a means to safely terminate or interrupt smart contracts, which has been described elsewhere as a “kill switch.”
Critics argue that this requirement could introduce a single point of failure and increase exploit risks, as smart contracts are designed to be immutable and resistant to termination. The act has also been criticized for drawing an equivalency between smart contracts and legal contracts, as well as for imposing rules around the protection of trade secrets on smart contracts.
The European Crypto Initiative (ECI) has been vocal in its opposition to the Data Act, asserting that it could make developers and deployers of smart contracts responsible for complying with requirements even if they do not have the means to do so. Additionally, overly strict rules could incentivize European blockchain companies to relocate.
Despite the potential impact of the Data Act on the blockchain sector, the means of enforcing these rules by EU government agencies remains unclear. However, it is evident that the act has sparked a significant debate within the industry.
The approval of the Data Act by the European Parliament marks a significant development in the regulation of smart contracts and data sharing in the EU. The implications of this act for the blockchain sector and the broader technology industry are yet to fully unfold, but it is evident that the act will continue to be a topic of discussion and debate for stakeholders in the months to come.