Legislation passed under EU Data Act to be regulated through smart contracts

PANews, March 14, according to The Block, on Tuesday, the European Parliament passed legislation under the Data Act with 500 votes in favor and 23 votes against. The legislation and its provisions on smart contracts do not explicitly target the crypto industry, but instead focus on data from connected devices or the Internet of Things. However, some in the industry worry that if the scope is not clearly defined, the data bill could have a profound impact on crypto, especially as smart contracts underpin DeFi infrastructure.

Smart contracts fall under the provisions of Article 30 of the Data Act, ie “Basic Requirements for Smart Contracts Concerning Data Sharing”. Terms include “strict access control mechanisms” and trade secret protection integrated into the smart contract design. There needs to be the possibility of terminating or interrupting the trading mechanism, and legislators need to decide under what conditions this will be allowed. Most importantly, smart contracts will be expected to face the same “level of protection and legal certainty” as any other contract generated through different means.

Last month, Circle’s director of EU affairs said the European Parliament had reached a preliminary agreement on an EU data law, which would include regulation of smart contracts.

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