EU finalizes controversial smart contract kill switch rules under Data Act – The Data Act was first proposed in early 2022 and passed by the European parliament on March 14.
The European Union (EU) legislators have reached an agreement to move ahead with the controversial Data Act that drew scrutiny from the crypto community earlier. The finalization of the deal was confirmed by EU’s Commissioner for Internal Market Thierry Breton in a Tweet calling it a “milestone in reshaping the digital space.”
Another deal! 👍👍
⁰Tonight’s agreement on the #DataAct is a milestone in reshaping the digital space.
— Thierry Breton (@ThierryBreton) June 27, 2023
The Data Act was passed by the European parliament on March 14 and was awaiting a negotiations among EU lawmakers on the final version of the bill. The Data Act is focused on fair use of industrial data and removing barries on fairly sharing data generated by a range of data centered services such as the Internet of Things.
The European parliament had claimed this act would encourage greater use of data resources to train algorithms which would eventually lead to lower cost of services. However, the act drew heavy criticism from the crypto community due to the proposals around smart contracts and the vaugensss of it.
The Data Act has provisions for imposing altering requirements for smart contracts including a kill switches that allow them to be safely terminated. The act establishes rules for the smart contracts for parties providing sharable data, including “safe termination and interruption,” and incorporates safeguards to preserve trade secrets and prevent illicit data transfers.
Many crypto proponents belive the new EU legislation would force smart contract developers to design reset possibilities to allow termination or interruption of transactions. This may restrict innovation or make it difficult for smart contracts in the crypto industry to comply, some in the industry worry. ￼ ￼
Dr Martin Hiesboeck, head of research at Uphold had noted earlier that the smart contracts are one step closer to falling under European Union-wide regulation within a broader strategy on data markets.
Cointelegraph reached out to EU’s commissioner for internal market Thierry Breton for comments on the raging controversy around smart contracts, but didn’t receive a response at press time.