European Parliament Approves Data Act Including Smart Contract Termination

European Parliament's Approval of the Data Act

The European Parliament has recently voted to approve the Data Act, a piece of legislation that has sparked significant debate due to its stipulation concerning smart contracts. This legislation passed with 481 votes in favor and 31 against, highlighting strong support among members. However, to become law, it requires further approval from the European Council, which includes the heads of the 27 EU member states.

Key Provisions of the Data Act

A notable aspect of the Data Act is its requirement that smart contracts must have the capability to be terminated. This provision aims to address concerns related to the rigidity and permanence of smart contracts, which are self-executing contracts with the terms directly written into code. The legislation seeks to ensure that these digital agreements can be altered or ended if necessary, providing more flexibility and control over their use.

Implications for the Blockchain Industry

The requirement for termination capabilities in smart contracts could have significant implications for the blockchain industry. Smart contracts are fundamental to many blockchain platforms and applications, and the ability to terminate them introduces a level of adaptability not previously mandated. This could lead to changes in how blockchain developers design and implement smart contracts, emphasizing compliance with these new legal standards.

Next Steps in the Legislative Process

With the European Parliament's approval, the next step in the legislative process is obtaining the consent of the European Council. This stage is crucial as it involves the agreement of all EU member states' leaders. The outcome will determine the implementation of the Data Act across the European Union, potentially setting a precedent for smart contract regulation worldwide.

The approval of the Data Act marks a significant development in the regulation of digital contracts, reflecting the EU's progressive approach to adapting its legal framework to technological advancements.