IOTA Foundation, a prominent blockchain company based in Germany, and its collaborators just released a joint response expressing their views towards the Data Act pushed by the European Union (EU). The statement highlights the need for clarity and collaboration between regulators and the blockchain industry, particularly concerning the interpretation of smart contracts and permissionless technology within the proposed law. The aim is to ensure that regulations support innovation, protect consumers and investors, and foster a sustainable and secure digital economy.
The Goal of EU’s Data Act
In a nutshell, the EU’s Data Act seeks to unlock the potential of the data economy, enabling widespread access and use of industrial data while promoting a competitive European cloud market. One of the key aspects is empowering users of connected devices to access and share data generated by these devices, thereby stimulating aftermarket services and innovation.
The Act also includes measures to safeguard EU companies from unfair contractual terms, facilitate public sector access to private sector data in emergencies, and promote competition and choice in the cloud data-processing service market. The development of interoperability standards for data-sharing and processing is emphasized as well.
Interpreting the Data Act and the Role of Smart Contracts
The joint response of IOTA and company recognizes the progress made in addressing the concerns raised by the blockchain industry. While appreciating the efforts of policymakers, the collective highlights the need for a more comprehensive understanding of the distinction between “smart contracts” and “digital contracts” within the legislation. The importance of clear terminology is emphasized, as it can significantly impact the understanding and implementation of the rules.
According to the joint statement, the focus of the legislation appears to be on the intention and mutual consent of parties involved in a data-sharing agreement. It is clarified that the requirements of the Data Act apply when two or more parties choose to enter into a data-sharing agreement and consent to deploy a smart contract that complies with the Act’s requirements. The Act also emphasizes the role of European standardization organizations in defining common standards for smart contracts.
Clarity, Collaboration, and Future Discussions
The joint response emphasizes the need for further discussions and consultations with standardization committees and regulators to address open questions and establish a well-informed and harmonized regulatory framework. It advocates for a thorough examination of the potential implications of the Data Act on the use of smart contracts and permissionless blockchain technology.
The comment urges caution in defining “smart contracts” at the EU level, emphasizing the importance of understanding the nature and capabilities of permissionless technology before referencing such definitions in future legislation.
Building Trust and Ensuring a Balanced Approach
Throughout the negotiation process, the joint response highlights the need for increased dialogue and understanding between regulatory bodies and the blockchain industry. It acknowledges the efforts made by the blockchain industry to standardize smart contracts and increase legitimacy while safeguarding consumers and investors.
It further stresses that a proportionate and learning-oriented approach should guide regulatory actions, ensuring effective risk management without stifling the growth of this emerging industry.
Final Thoughts
Overall, the joint response by IOTA and its collaborators emphasizes the importance of clarity, collaboration, and ongoing discussions in shaping the EU’s Data Act. It advocates for a comprehensive understanding of smart contracts and permissionless technology, highlighting the need to address open questions and establish a harmonized regulatory framework.
This comes with the underlying belief that by fostering trust, engaging in dialogue, and maintaining a balanced approach, policymakers and the blockchain industry can work together to realize the shared goals of innovation, consumer and investor protection, and the establishment of a sustainable and secure digital economy going forward.