The European Union Data Act and Its Potential Impact on the Blockchain Industry
The final version of the European Union Data Act has been released, and it has raised concerns within the blockchain industry. The new rules, as seen by CoinDesk, do not address the industry’s pleas and could potentially make most smart contracts illegal. Here are the key points:
- The provisions in the act do not limit the scope of “smart contracts” to privately owned and permissioned data records as hoped by lobbyists.
- The act still refers to “smart contracts” instead of the industry’s preferred term, “digital contracts.”
- The act places responsibilities on the “vendors” of automated programs, which raises fears of perpetual and limitless liabilities in decentralized scenarios.
- Although the act applies only to the automated execution of data-sharing agreements for smart devices, it fails to specify private or permissioned networks, extending its scope beyond what the lobbyists had requested.
- The text of the act has been shared privately with member governments by Spain, the current chair of the talks, and it reflects the updates based on the provisional political agreement reached during a June 27 meeting.
For the act to become law, it needs formal approval from both the European Parliament and the Council of the EU. The potential impact of this act on the blockchain industry is significant. It may hinder innovation and development within the industry, as well as create legal uncertainty and increased liability for vendors. It remains to be seen how the industry will respond and whether any changes will be made to address the concerns raised.
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