The European Commission has reassured industry concerns that the Data Act, an EU bill now being deliberated, will not make smart contracts illegal. A spokesperson for the Commission said, “There is no reason to fear existing smart contracts would become illegal upon the entry into force of the Data Act.” The law is intended to cover software used to automate the execution of contracts, but industry lobbyists worry it could go much wider than intended. Chris Donovan, general counsel at the NEAR Foundation, said, “We’ve seen what regulatory uncertainty can do to our industry in other jurisdictions.” Smart contracts are programs that use blockchain technology to release funds automatically when given conditions are met, and have numerous applications in decentralized finance. An open letter sent to lawmakers and the Commission last week calls for a range of drafting changes to be made to the law to sweep away ambiguities. Donovan remains optimistic, saying, “I’m hopeful that we will be heard, and that those modest requests will be accommodated.”
EU Data Rules Won’t Make Smart Contracts Illegal, Commission Says
