By: Eliza Bennet
The European Parliament has voted in favor of the controversial Data Act, which encompasses a clause that may necessitate the installation of 'kill switches' on smart contracts. The Act was adopted with a strong majority, with 481 votes in favor, 31 against and 71 abstaining. However, it still requires the formal approval of the European Council to become law.
The proposed Act has given rise to concerns, specifically from members of the crypto industry, who argue that its demands could make developers and deployers of smart contracts responsible for adherence, even if compliance is beyond their capabilities. Key among the stipulations is the inclusion of a provision for the safe termination or interruption of a smart contract.
The European Crypto Initiative (ECI) has particularly taken issue with this mandate, asserting that it runs counter to the foundational principles of blockchain-based smart contracts, which are designed to preclude the possibility of termination. It notes that introducing any means of terminating a contract would create a single point of failure and give rise to exploit risks.
The enforcement mechanism to ensure compliance with the Act's rules remains unclear. However, critics of the Act worry that these stringent requirements could impel European blockchain companies to consider relocating.
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