The European DeFi industry is reportedly lobbying on a potential Data Act law that could eliminate smart contracts and shake up the broader Blockchain industry. The new law imposes an unusual requirement for DeFi altcoins and smart contracts…
DeFi altcoins face law aimed at terminating smart contracts
The European DeFi industry is worried about the Data Act law, which places an unusual requirement on smart contracts. Negotiations on the law are expected to end in June. Meanwhile, it is noteworthy that the scope of the bill is not fully specified in the articles regulating smart contracts.
The report includes advocates such as the European Crypto Initiative (ECI) urging policymakers to consider the danger of the spread of malicious blockchain developers in member states.
As such, the ECI says regulators hindering innovation and technological development will have unintended consequences. Marina Markezic, executive director of the European Crypto Initiative, said:
The worst-case scenario is whether we can even use public blockchains to use smart contracts while complying with Data Law requirements.
New article against the nature of blockchain
A source close to the negotiations noted that European institutions hope to promote smart contracts through the Data Law and are not considering regulating it. However, one of the critical concerns for the DeFi industry is Article 30. The law requires smart contracts to be designed in a way that allows them to be terminated or interrupted, contrary to the nature of the blockchain.
Meanwhile, a European Commission spokesperson declared that the controversial article is technology neutral. Accordingly, it “sets high-level requirements for smart contracts, whether or not they are based on blockchain technology or a more traditional database.”
When will the new law be in effect?
The three European institutions leading the negotiations have approached the final decision on the Data Law, and negotiations will continue this month and at subsequent tripartite meetings. The date when the law will emerge will emerge from the meetings here. You can follow the crypto money regulation developments in the EU region, which we have transferred as Kriptokoin.com.
These DeFi altcoins are under the spotlight
To summarize, European regulators are preparing a new law that will allow smart contracts to be terminated or interrupted, contrary to the nature of Blockchain. In this case, the uses of the smart contract capability that DeFi giants like Ethereum boast can be greatly restricted. According to CMC data, the largest smart contract platforms currently covered by the law are:
- Ethereum (ETH)
- Binance Coin (BNB)
- Cardano (ADA)
- Left (LEFT)
- Avalanche (AVAX)
- Polkadot (DOT)
- Chainlink (LINK)
- Uniswap (UNI)
- Algorand (ALGO)
- Polygon (MATIC)
- Terra (Luna)
- AAVE (AAVE)
- SushiSwap (SUSHI)
- Compound (COMP)
- Serum (SRM)
- Yearn.finance (YFI)
- Curve DAO Token (CRV)
- PancakeSwap (CAKE)
- Thorchain (RUNE)
- Rhine (REN)
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