• The EU’s final version of the Data Act has largely ignored pleas from blockchain industry organizations, which worries that it could make most smart contracts unlawful.
• The law still refers to “smart contracts” rather than the industry-preferred “digital contracts” and puts duties on “vendors” of automated programs.
• A provisional political agreement was reached by negotiators on June 28th but no text has been released until now.

EU’s Data Act Final Draft Still Contains Controversial Smart Contract Kill Switch

Industry Pleas Ignored

Lawmakers appear to have largely ignored pleas from organizations linked to Polygon, NEAR and Cardano about the clause, according to a final version of the text seen by CoinDesk.

Text Still Refers To “Smart Contracts”

Provisions intended to ensure automated data-sharing agreements contain a kill switch under which they can be safely terminated still refer broadly to “smart contracts,” and aren’t limited to privately owned and permissioned data records as lobbyists hoped , a July 7 version of the law indicates.

Political Agreement Reached

Negotiators said they had struck a deal on the controversial text on June 28, shortly after organizations linked to numerous blockchains, including Stellar, Polygon, NEAR and Cardano, expressed their concerns in an open letter.

Text Clarified For Automated Programs

The text has changed from the European Commission’s original February 2022 proposals to clarify that the rules apply only when programs are used for “automated execution” of data-sharing agreements that might be made for smart devices like connected cars and fridges.


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