HomeNewsIOTA and Blockchain for Europe Advocate for Innovation-Friendly Regulation

IOTA and Blockchain for Europe Advocate for Innovation-Friendly Regulation

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  • Concerns about using “digital contract” vs. “smart contract” in the EU Data Act’s wording highlight potential misunderstandings in the sector.
  • The Data Act emphasizes mutual consent in data-sharing agreements and requires clarity on smart contracts’ features and compliance standards.

The Dispute over Digital vs. Smart Contracts

In response to the finalized EU Data Act, concerns from within the blockchain sector emphasize the potential misinterpretations arising from the use of the term “digital contract” rather than the industry-preferred “smart contract.” This distinction isn’t merely academic but holds tangible implications for how rules are understood and implemented. The difference between these terms can shape the trajectory of both regulatory approaches and technological innovations.

The core emphasis of the Data Act appears to focus on mutual consent between parties in data-sharing agreements. Specifically, it delineates that Article 30’s requirements become relevant only when two or more entities opt into a data agreement, consenting to employ a ‘smart contract’ – as characterized by Article 2(16). Moreover, such agreements should transparently delineate features like the smart contract’s safe termination methods and access control mechanisms.

Role of European Standardisation Bodies

A significant portion of Article 30 sheds light on the influential role European standardization organizations will play. These bodies are entrusted with sculpting common standards, guiding vendors or developers of smart contracts towards ensuring compliance with Article 30 (1)’s stipulations.

Recognizing the Act’s provisions, it becomes imperative to propel dialogues and consultations with these standardization entities and secondary-level regulators. Such deliberations are vital to demystify the Data Act’s broader context, facilitating a harmonized regulatory ecosystem. A comprehensive review of the implications on the utility of smart contracts and permissionless blockchain technology is a necessity within these dialogues.

But, while strides have been made in legally characterizing “smart contracts” at the EU tier, apprehensions linger regarding possible inadvertent ramifications in upcoming regulatory outlines. Delving deeper into the intrinsic nature of permissionless tech is essential before anchoring this definition into other regulatory statutes. Overlooking this could unintentionally suppress the growth and application of smart contracts and the larger permissionless blockchain landscape.

Throughout the negotiation saga, an evident requirement emerges: a profound dialogue and understanding between the regulatory and blockchain fraternities. It’s paramount to eradicate prevalent misconceptions that have sowed confusion amongst regulators and developers alike. To elucidate this emergent industry’s intricacies, and especially the intermediary role, both education and heightened awareness are crucial.

To genuinely exploit the prowess of permissionless tech and address endemic risks in the conventional finance arena, regulators should embrace an all-encompassing understanding of its foundational tenets before rolling out regulations. A balanced approach, imbued with an educational bent, should dictate all regulatory moves. Only then can the sector ensure risk mitigation while nurturing this budding industry’s growth.

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Marcel Knobloch
Marcel Knobloch
Marcel is the managing partner of ETHNews and is also known as Collin Brown in the crypto community. He is a seasoned Bitcoin investor who entered the crypto scene during its early stages and has since become a veteran trader in both the cryptocurrency and forex markets. His journey began in 2012 when he made his first investment in Bitcoin, marking the beginning of his deep-rooted passion for blockchain technology and digital assets. With a mission to demystify the intricacies of blockchain for the masses, Marcel endeavors to bring the world of cryptocurrencies closer to everyone. His insightful reports are dedicated to shedding light on the latest developments and innovations within the realms of Bitcoin, Ethereum, Ripple (XRP), IOTA, VeChain, Cardano, Hedera, and numerous other cryptocurrencies. Marcel's in-depth analysis and commitment to providing accessible information make him a trusted source for both novice and experienced crypto enthusiasts. Marcel's academic background includes a Master's Degree in Business Education, which has equipped him with a solid foundation in financial markets and investment strategies. Over the past decade, he has amassed invaluable experience working with various startups across the globe, enriching his knowledge and understanding of the ever-evolving cryptocurrency landscape. With his wealth of expertise and dedication to empowering others with crypto knowledge, Marcel continues to be a driving force in the cryptocurrency community. Business Email: marcel.knobloch@hotmail.com Phone: +49 160 92211628