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EU’s Revised Council Data Act Includes Smart Contract Regulations

The European Union (EU) reportedly released the amended draft of its Data Act on Monday, which observers say will take more work to meet for most smart contracts. Under the revised legislation, smart contracts are expected to contain a termination or interruption feature.

The New Smart Contract Regulations

The European Union Council, the governing unit representing the national governments of all member states, reportedly agreed on the proposed text on Friday. According to sources familiar with the development, the move echoes the previous ones already approved by legislators at the European Parliament.

Moreover, the parliament and council presided over by the European Commission will discuss the final draft details. Meanwhile, the new legislation will require smart contracts to be able to halt or terminate any transactions.

The council chairman, Erik Slottner, stated on Friday that the new law would allow the free flowing of data across and within the European Union and industries. Slottner added that these benefits businesses, public institutions, researchers, and society.

Meanwhile, the new guidelines apply to smart contracts, making data readily available as part of the need to control smart applications like home appliances and cars. However, it still needs to determine how far the new rules will go in ensuring the disruption of automated actions.

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Marina Markezic, the founder of the Europe-based lobby group, European Crypto Initiative, noted that it would be difficult but possible for most smart contracts to comply with these updated guidelines. However, Thierry Breton, a high-ranking official at the commission handling matters relating to digital technology, explained that he does not support the lawmaker’s view.

According to Breton, this requirement will hinder the ability to adopt standards for smart contracts.

Blockchain Community Kick Back On New Bill

As expected, the blockchain community has reacted to the proposed regulation. The community noted that the move would undermine the principle of automated and irreversible programs, the primary ethos of smart contracts.


The amended Data Act bill was passed on March 14 by the EU after 500 lawmakers voted in favor of it, with 23 against while 110 remained neutral. Pilar del Castillo Vera, the lead lawmaker supporting the proposed regulations, noted that the new rules would give consumers and firms a say on what can be done with data gathered from connected tech products.

Some of the provisions, including Vera’s bill amendment, signify that smart contracts must be able to access controls and protect transaction histories. They would also have features to stop or reset an action that undermines their uses.

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However, the blockchain community does not agree with the bill, with Thibaut Schrepel of the VU Amsterdam University stating that the move will significantly hinder smart contracts. Schrepel, an associate professor and a blockchain specialist, noted that the text on what the kill switch in the smart contract will do is unclear.

Another critic pointed out that the move will impact the foundational nature of smart contracts and automated computer programs.

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Bradley Nelson

Bradley Nelson is a US based cryptocurrency news writer for Tokenhell, he helps readers stay up to date with the latest trends and news from the blockchain and crypto world. Bradley has been a crypto enthusiast since 2018.

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