May 28, 2023

The Council of the EU equated smart contracts with software for the Internet of things

Article reading time:
1 min.

The Council of the EU equated smart contracts with software for the Internet of things

The Council of the European Union agreed to an amendment to data law, according to which smart contracts must provide for the possibility of forced termination.

Smart contracts are stored inblockchain programs that run automatically. This allows the parties to the agreement to save time and not depend on the actions or decisions of a third party.

In the current version of EU legislationsmart contracts should be able to terminate or interrupt their activities. Thus, providing the ability to manage data and events by analogy with controlling software for home appliances of the Internet of things (IoT) of a smart home. Such as kettles, refrigerators and similar equipment.

The amendment bill was passed inthe European Parliament by an overwhelming majority and, according to the initiators of the amendment, "will allow data to be freely transferred within the EU and between sectors in the interests of business, researchers and public administrations."

The future amendments caused the crypto communityconcerns about undermining the concept of decentralization and that smart contracts are inherently required to be automated and immutable programs. European Crypto Initiative founder Marina Markezic said it could be difficult, if not impossible, for most smart contracts to comply with the new rules.

Earlier, the former Belgian finance minister, the economic representative of the right-wing political party ECR in the European Parliament called
EU authorities to immediately ban cryptocurrencies.