EU Data Act Proposes Shutdown Function for Smart Contracts
The European Union has published its new Data Act, a law proposal that aims to regulate the generation and handling of data by the actors that harness it. The act, in its large scope, touches on the subject of smart contracts and proposes that every smart contract should have a termination function to stop the flow of transactions when required. Smart Contracts Might Be Stifled by EU Data Act
The newly proposed EU Data Act, published on February 23, aims to regulate and control the ways in which data is being generated, bringing legal clarity to the data market in Europe. According to a press release, the new Data act seeks to “ensure fairness in the digital environment, stimulate a competitive data market, open opportunities for data-driven innovation and make data more accessible for all.”
However, due to its large scope, this new act touches the subject of smart contracts, which are pieces of software designed to execute certain tasks based on data inputs. The document, in its article 30, titled “essential requirements regarding smart contracts for data sharing,” defines the requirements that smart contracts must fulfill to be deployed in conformity with EU laws.
One of these requirements, called “safe termination and interruption,” states that approved smart contracts shall:
…include internal functions which can reset or instruct the contract to stop or interrupt the operation to avoid future (accidental) executions.
Another requirement for smart contracts to be validated by the EU includes the ability to audit the contracts, with the possibility of obtaining a record of the transactions made in the past by the software. Limited Applicability
The proposal of interruptible smart contracts and the standardization of these smart contracts to the new requirements imposed by the Data Act were received negatively by some analysts, who criticized the scope and the applicability of the document. This is the case with Thibault Schrepel, Associate Professor of Law at VU Amsterdam, who stated:
Now, this is absolutely huge/controversial. It imposes smart contracts (that make data available) to be stoppable. So… basically, all oracles *shall* be redesigned (but how?), or else they will infringe the law.
Schrepel further stated that the approval of this act would make millions of online smart contracts illegal in the proposed jurisdiction, with no way of adapting them to the requirements presented in the document.
The EU has had its sights on cryptocurrencies recently, with some of its countries lobbying for the creation of a crypto AML watchdog in the region, according to reports.
What do you think about the Data Act and its requirements when it comes to smart contracts? Tell us in the comments section below. Tags in this story applicability, Cryptocurrency, data act, Ethereum, EU, Regulation, Smart Contracts
Sergio Goschenko
Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved. Hillary Clinton Urges Biden Administration to Pressure Crypto Exchanges to Block Russian Users REGULATION | 20 hours ago Report: Israel Defense Ministry Seized Crypto Wallets Holding Hamas-Destined Funds REGULATION | 1 day ago
Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleSouth African Mobile Network Operator MTN Buys Land in the Metaverse Next articleSkate Punks Club NFT Sales – March 4 and 5, 2022 Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItFarmville Creator Zynga to Launch NFT Games, Says Gaming Firm"s Blockchain Lead
American social game developer Zynga has plans to launch non-fungible token (NFT) games in the near future. Zynga’s vice president of blockchain, Matt Wolf, told the press that the company is looking at the cycle right now and “figuring out ... read more.Students Mining Crypto in Dorms May Face Criminal Prosecution in Russia, Lawyer Says Topps Plans to Auction Rare 1952 Mickey Mantle NFT Card Minted on Ethereum Global Regulators "Going Full Steam" on Crypto — Official Says "Current Structure Is No Longer Fit for the Purpose" Fitch Ratings Downgrades El Salvador Deeper Into Junk Status Citing Bitcoin Risks