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  • Writer's pictureSarah Dixon

EU Parliament Passes Data Act That Affects Smart Contracts


The European Parliament has voted in favor of proposed legislation that will challenge the immutability of smart contracts.

The European Parliament on Tuesday adopted legislation under the Data Act which includes provisions on smart contracts and the internet of things (IoT). The legislation was passed with 500 votes in favour and 23 against.





Although the proposed legislation, which is not law yet, does not take specific aim at crypto, it could affect decentralized finance (DeFi), according to reports by Blockworks. The proposed legislation addresses smart contracts under Article 30. It includes provisions such as “rigorous access control mechanisms at the governance and smart contract layers” and protections of trade secrets integrated into the design of smart contracts. The Block reports that smart contracts would have to be designed under the new provisions with the possibility to terminate or interrupt transaction mechanisms.


Under the new rules, smart contracts will be subject to “harmonized standards” defined in the Act.

The new version of the bill also reintroduces strict compliance measures for smart contract developers that were previously removed. The bill reads:

The vendor of a smart contract or, in the absence thereof, the person whose trade, business or profession involves the deployment of smart contracts for others in the context of an agreement to make data available shall perform a conformity assessment with a view to fulfilling the essential requirements.

Confusion And Uncertainty Over The Data Act

The revised version of the bill has drawn criticism from the DeFi community. Curve Finance, a major decentralized exchange, said it would be “impossible to comply” with the new regulations:




Thibault Schrepel, an associated professor at the VU University Amsterdam, said the new bill “endangers smart contracts to an extent that no one can predict.” He tweeted saying:

Article 30 does not provide clarity as to who should be able to ‘terminate the continued execution of transactions.’ Adding, “Is it the creator of the smart contract? Public authorities? Courts?”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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