Today the EU voted to pass the ‘Data Act’, which has a single clause directly addressing blockchain smart contracts. Many in the crypto community object to the requirement for a kill switch in smart contract code to stop the smart contract from functioning, mainly if there’s a problem. This impacts immutability. Oddly, there isn’t massive pushback against the other key requirement for access control mechanisms which goes against the permissionless nature of public blockchains.
However, the core of the Act is primarily targeted at the Internet of Things and data sharing for industrial purposes. The text was passed with 500 votes approving it and 23 against it. For the legislation to be finalized, it has to go through Europe’s cumbersome trilogue negotiations between Parliament, the Commission and the European Council that represents the individual states. So there’s still time for amendments.
Professor Thibault Schrepel, Co-Director of the Amsterdam Law & Technology Institute at VU Amsterdam, noted that the smart contract clause doesn’t define ‘smart contracts for data sharing’. If this is cleared up to apply for example to machine to machine (M2M) data sharing, then some of the other aspects of the clause might be less concerning.
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