The European Commission has taken steps to address the crypto industry’s “Data Law” fears, noting that new EU data rules address concerns over smart contracts.
The crypto industry is concerned that the Data Law may regulate smart contracts in such a way that they cannot withstand the risk of manipulation.
EU Commission Alleviates Concerns Over Smart Contracts With Data Law
The EU draft Data Act has been clarified to allay fears that smart contracts will impose unenforceable requirements that require them to rely on manipulation, securely reset, and provide access control. A spokesperson for the commission stated that existing smart contracts will not become illegal once the Data Act goes into effect.
However, industry leaders remain concerned that the Data Law may be broader than planned. Some crypto companies are stated to be followed by securities regulators in the US, stating that the restrictions proposed by the EU can be extremely challenging for the industry and in some cases unenforceable.
Recently, an open letter was sent to address these uncertainties with some amendments to the law. The letter states that the law could endanger smart contracts written on their blockchains such as Ethereum, Avalanche, Cardano, NEAR and Polkadot and harm the European economy.
Both branches of the EU legislature have approved their own versions of the text containing the controversial smart contract provisions. The legislative process continues.
