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European Union (EU) lawmakers have reached an agreement to proceed with the European Data Act, a legislation that has sparked criticism from the crypto community. EU’s Commissioner for Internal Markets, Thierry Breton, confirmed the deal in a tweet, referring to it as a significant milestone in reshaping the digital space.
While the European Parliament had already passed the Data Act on March 14, negotiations among EU lawmakers regarding the final version of the bill have been ongoing. The act focuses on the fair use of industrial data and aims to remove barriers for the equitable sharing of data generated by various data-centered services, such as the Internet of Things.
Although the act was intended to promote the utilization of data resources to train algorithms and ultimately reduce service costs, it faced substantial backlash from the crypto community due to its provisions concerning smart contracts and their ambiguous nature.
The act introduces measures that impose specific requirements on smart contracts, including the implementation of kill switches to safely terminate them. It establishes rules for smart contracts involving parties sharing data, incorporating provisions for “safe termination and interruption.” Additionally, safeguards are included to protect trade secrets and prevent unauthorized data transfers.
Many proponents of cryptocurrencies and smart contracts express concerns that the new EU legislation will compel developers to design reset mechanisms that enable termination or interruption of transactions. This may impede innovation or pose challenges for compliance with smart contracts in the crypto industry.
Martin Hiesboeck, head of research at Uphold, previously highlighted that smart contracts are drawing closer to EU-wide regulation as part of a broader strategy addressing data markets.
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