European Parliament Passes Data Law Legislation, Potentially Affecting Smart Contracts in the Encryption Industry

03/14/2023 11:59 • Metaverse Matters • 153 views

It is reported that on Tuesday, local time, the European Parliament passed the relevant legislation of the Data Law with 500 votes in favour and 23 against. The legislation and its provisions on smart contracts are not specifically targeted at the encryption industry, but some people in the industry worry that if the scope is not clearly defined, the data law may have a far-reaching impact on encryption, especially in the area of smart contracts. It is reported that smart contracts belong to the provisions of Article 30 of the EU Data Law, namely “basic requirements for smart contracts for data sharing”. The provisions include “strict access control mechanism” and trade secret protection integrated into the design of smart contracts. It is necessary to have the possibility of terminating or interrupting the transaction mechanism, and the legislator needs to decide under what conditions it is allowed to terminate or interrupt the transaction. （The Block）

The European Parliament regulates smart contracts according to the data law

Analysis based on this information:

The European Parliament has recently passed the Data Law with an overwhelming majority of 500 votes in favor and only 23 against. While the legislation and its provisions on smart contracts are not directly aimed at the encryption industry, some experts express concerns that its scope may have a significant impact on encryption, especially in the area of smart contracts.

Smart contracts are governed by the provisions of Article 30 of the EU Data Law. This article sets out the basic requirements for smart contracts when it comes to data sharing. One of the most significant provisions is the need to incorporate strict access control mechanisms and trade secret protection into the design of smart contracts. This requirement aims to ensure the confidentiality and integrity of data transmitted through smart contracts.

Additionally, the Data Law mandates the possibility of terminating or interrupting the transaction mechanism, but it leaves the decision of under what conditions to do so to the legislators. While this provision aims to ensure that any data privacy violations or data breaches can be halted at any time, it also presents a challenge for the encryption industry as it needs to ensure that their smart contracts comply with the relevant regulations.

The potential impact of the Data Law on the encryption industry can be far-reaching, especially as smart contracts become increasingly popular in various industries. Therefore, stakeholders in the encryption industry must ensure that their products and services comply with the relevant regulations to avoid any legal consequences.

In conclusion, the European Parliament’s passage of the Data Law legislation represents a significant step towards ensuring data privacy and security across the EU. While the provisions on smart contracts are not specifically directed at the encryption industry, stakeholders must ensure that their products and services comply with the relevant regulations to avoid legal repercussions.

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