1 year ago
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Agreed on bill based on data law
The European (EU) Council has agreed to a bill based on the data law on the 24th. The bill, which sets out rules for fair access and use of data, is feared to affect smart contracts for crypto assets (virtual currencies).
The bill specifically targets internet-of-things (IoT) data, such as consumer electronics that are connected to the internet. However, some voices in the crypto industry have warned that if the scope of the data law is not clearly defined, it could have major implications for cryptocurrencies as well.
The final content of the bill will now be discussed between the European Parliament and the European Council, mediated by the European Commission. The European Council explained the gist of the bill as follows:
The bill proposes new rules on the rights to use and access data generated within the EU in all sectors of the economy. It aims to ensure equity in the digital environment, foster competition in data markets, open opportunities for data-driven innovation, and make data accessible to all.
Smart contracts fall under Article 30 of the Data Act, “essential requirements for smart contracts for data sharing.” Provisions include incorporating “strict access control mechanisms” into the design of smart contracts and “protecting trade secrets.”
Furthermore, a mechanism that allows smart contracts to suspend or terminate their activities is required, which may reduce the strength of smart contracts as “automated, unchangeable programs”. It’s a form that raises concerns.
What is a smart contract
It refers to a mechanism that automatically executes a contract according to pre-programmed conditions. Ethereum is a typical blockchain that implements smart contract functions. When concluding a contract, there are many cases where administrative work such as intermediary and contract creation is required, so by enabling automatic contract execution, efficiency improvement and cost reduction can be expected. .
Cryptocurrency Glossary
Industry voice
The European Parliament had adopted the bill with 500 votes in favor and 23 against on the 14th, before the Council agreed.
At this time, Marina Markezic, head of the European Cryptographic Initiative (EUCI), a non-profit organization that promotes blockchain, said, “Most smart contracts in existence today find it difficult to comply with this provision. would be nearly impossible,” he said.
@MarinaMarkezic:
“The rules proposed don’t align to the smart contracts that we know today, and may spur the development of a different technology to fit the mold.”
—European Crypto Initiative 
(@EuCInitiative) March 14, 2023
“The proposed rules are not in line with smart contracts as we know them today, so they may encourage the development of technologies other than smart contracts that fit the mold presented by the bill.” There is,” he continues.
On the other hand, some are more optimistic than this. Natalie Linhart, legal counsel for blockchain software company ConsenSys, commented:
Article 30 of the Data Law is considered to be a limited provision that applies to smart contracts that transfer data for IoT products, and not to decentralized finance (DeFi) applications.
However, Linhart continued, “We hope that future legislation will ensure that the standard cannot be extended to cover other smart contracts, such as cryptocurrencies.”
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