The European Parliament has voted in favor of the Data Act, part of which is to include an emergency kill switch in the functionality of smart contracts.
The European Parliament has approved the Data Act, a comprehensive data protection bill that includes rules for data sharing, protection, and dissemination. One of the controversial points of the bill is the introduction of an option to modify smart contracts if necessary.
The text of the approved document states that smart contracts should have a kill switch function, which will suspend their work, reset individual actions, or close all operations altogether. European lawmakers are simply asking to make the technology manageable, which directly goes against the basic principles of decentralization and smart contract technology.
Notably, the document doesn’t specify under what conditions and who exactly will decide on the suspension of smart contracts. However, officials insist that such a possibility should be provided.
After the initial publication of the bill, the local blockchain community went on alert, claiming that it would simply be illegal to use smart contracts on public blockchain networks in this case. Yet, the European Commission argues that the bill has nothing to do with blockchain and the community’s fears are unfounded.
For the law to come into force, it must pass through the vote of the European Council. In other words, all 27 member states of the European Union must approve the legislation.
European lawmakers have been actively developing a regulatory framework for innovative technologies. In particular, the MiCA bill regulating the activities of crypto companies was approved by the European Parliament and shall come into force next year.
