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European Blockchain Sector Pushes To Avert Rules Affecting Smart Contracts

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European Blockchain Sector Pushes To Avert Rules Affecting Smart Contracts

  • Negotiations on the European Data Act are expected to wrap up by the end of June.
  • Further discussion will be at the future dialogue meeting on May 23.

The European blockchain sector is preparing to make a last push to avert rules that would kill the smart contracts underlying the decentralized finance (DeFi) protocols that European authorities have been striving to introduce.

Moreover, negotiations on the European Data Act, which aim to control data transferred between smart devices utilizing IoT networks, are expected to wrap up by the end of June. The DeFi industry as a whole is concerned about the lack of transparency in the rules governing the underlying smart contracts.

DeFi proponents, such as the European Crypto Initiative, have urged politicians to address the concerns of broader blockchain developers who may be affected by the Data Act’s reach. According to the European Crypto Initiative, this kind of fallout might be fatal for DeFi.

Marina Markezic, executive director of the European Crypto Initiative, stated:

“The worst-case scenario is whether we would even be able to use public blockchains for using smart contracts while complying with the Data Act requirements. Europe shouldn’t shoot itself in the foot by inadvertently damaging innovation and technological development in the broader blockchain industry”.

All Eyes on Next Meeting

Concerns within the industry about the upcoming discussions may be addressed by legislators next week. The disputed article on smart contract legislation is technology-neutral, according to a European Commission official.

According to the spokesman, it sets high-level requisites for smart contracts. Regardless of whether the contracts are stored in a blockchain or a more conventional database.

However, the Data Act is being seen differently by the three European institutions involved in the negotiations. The problem with the Data Act wording will be discussed at the future dialogue meeting on May 23.

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