Blockchain Industry Groups Demand Modifications to EU ‘Data Law’

Request for clarification of the scope of the “data law”

Crypto asset (virtual currency) industry groups such as the European Blockchain Association submitted a letter to the EU Commission on the 15th. He proposed amendments to the “Data Law,” which has pointed out the risk of unintended regulation of smart contracts.

Industry groups advocate “technological neutrality,” the proper enforcement of regulations, regardless of the technology used.

He added that if the text remains as it is, it could cause significant problems for small and medium-sized businesses that rely on these smart contracts for their business.

The letter also lists the names of prominent blockchain and cryptocurrency-related companies, including Ripple, Coinbase, Kraken, Cardano Foundation, and Stellar Development Foundation.

By way of background, the European (EU) Council agreed in March to draft legislation based on the Data Act. It establishes rules for fair access and use of data, but concerns have been raised that it could affect smart contracts if the scope is not clearly defined.

Although the data law primarily covers data from the Internet of Things (IoT), the lack of scope of the text raises concerns that the cryptocurrency industry may also be affected.

In addition to things like smart contracts being tamper-resistant, data law requires mechanisms that allow contracts to suspend or terminate their activity at any time. If this is applied to permissionless blockchains, it is pointed out that the strength of smart contracts, which are “automated, immutable programs,” may be diminished.

Before the bill can be enacted, the final content needs to be discussed between the European Parliament and the European Council.

Correction proposal

The European Blockchain Association and others will revise the wording of Article 30 of the Data Act to limit its scope to private blockchains and smart contracts that are deployed in permission-type electronic data records used in companies, etc. is proposing.

In addition, it presents amendments to prevent cryptocurrency public chains from being inappropriately regulated, such as rewriting the term ‘smart contract’ to ‘digital contract’.

EU official commented “no need to worry”

Amid all these concerns and proposed amendments, an EU Commission spokesperson explained that there are no concerns that the crypto industry has. “There is no need to worry about existing smart contracts becoming illegal with the entry into force of the Data Law,” said the official.

However, insiders in the cryptocurrency industry are not satisfied with these answers.

For example, NEAR Foundation General Counsel Chris Donovan said, “The wording of the current draft is so broad that it will almost inevitably lead to uncertainty as to its scope.” . It is a form of opinion that the current bill needs to be amended more clearly.

In April, Polygon Labs, which promotes the development and dissemination of the Polygon (MATIC) network, also submitted an open letter to the EU parliament, etc., requesting amendments to the data law.

connection: Polygon Labs demands amendments to European ‘data law’

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