In a landmark decision, the European Parliament has voted to pass the Data Act, a contentious piece of legislation that includes a provision mandating the termination capability of smart contracts. The vote, held on November 9, saw 481 Members of the European Parliament (MEPs) in favor and 31 against. For the Data Act to become law, it now requires approval from the European Council, comprising the heads of each of the 27 European Union member states.

A key aspect of the adopted Data Act is the requirement that smart contracts must have the capacity to be “interrupted and terminated.” The legislation also includes controls allowing functions to reset or stop the contract. At its core, the Data Act aims to empower users to access data generated by smart devices, with the European Commission asserting that a staggering 80% of such collected data remains unused.

However, critics of the Act, particularly concerning the smart contract clause, have raised alarm bells. Some argue that the definition is overly broad and lacks clarity on when interruptions or terminations should take place. In a joint open letter sent in June, EU blockchain advocacy bodies and numerous cryptocurrency firms expressed concerns, suggesting that the Data Act might potentially deem smart contracts utilizing data from public blockchains, such as Ethereum, in violation of the law.

The European Commission, responsible for drafting the legislation, has sought to allay fears, stating that the Data Act is not targeted at blockchain technology. It has emphasized that concerns about the legislation making smart contracts illegal are unfounded. Despite reassurances, the contentious nature of the smart contract stipulation has ignited debates within the European Parliament, and its ultimate fate rests on the approval or rejection by the European Council. The decision will significantly impact the regulation and use of smart contracts within the European Union.

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Filed under: Bitcoin - @ November 10, 2023 5:16 pm