- IOTA has asked lawmakers to reconsider the EU Data Act which lacks clarity in differentiating smart contracts from traditional legal contracts.
- IOTA said it is important to initiate further discussions and consultations with standardization committees on their interpretation of the Data Act.
The EU Data Act has been somewhat controversial in a way that poses significant risks to permissionless blockchain networks. Additionally, there have been concerns about the way that the EU Data Act brings restrictions to the current use of smart contracts.
In order to safeguard blockchain innovation in Europe, IOTA has joined hands with the European Blockchain Council and other players who have issued a joint statement. Through the joint statement, IOTA and its partners are addressing the latest circulated Data Act proposal thereby advocating a balanced and conducive regulatory environment fostering innovation while safeguarding investors’ interests.
[Data Act Update] In ongoing efforts to safeguard #blockchain innovation in Europe 🇪🇺, the #IOTA Foundation and collaborators present a joint statement addressing the latest circulated Data Act proposal. Read it here:
🔗https://t.co/lBVK5XAln3— IOTA (@iota) July 17, 2023
Currently, the Data Act contains provisions that define smart contracts for data sharing and their essential requirements. IOTA believes it is vital to have open and constructive discussions to fully understand the impact of the proposed legislation on the dynamic crypto industry. Through these discussions, IOTA seeks to identify areas that need improvement and strive to establish a clear regulatory framework.
IOTA has shown eagerness for engaging in dialogue with relevant stakeholders to address concerns and work together towards a regulatory framework that encourages innovation, safeguards users, and fosters the ongoing development of the blockchain industry.
IOTA’s Take on EU’s Data Act
The existing Data Act lacks clarity in differentiating smart contracts from traditional legal contracts, which could potentially create unnecessary complications if the regulation is implemented in the current state.
IOTA noted that it is important to initiate further discussions and consultations with standardization committees and secondary regulators based on their interpretation of the Data Act. It will be essential to address any unresolved issues stemming from the broader provisions of the Data Act and establish a well-informed and unified regulatory framework. In their official response, IOTA noted:
While policymakers have emphasized the need for the industry to trust their intentions, we urge for reciprocity in trust-building. The blockchain industry has proactively worked towards standardizing smart contracts and implementing measures to increase legitimacy while safeguarding consumers and investors.
It is crucial for regulators to acknowledge these efforts and understand that forcing an intermediary in a disintermediated environment does not necessarily enhance technology security but introduces new risks.
IOTA emphasized that in order to fully unlock the capabilities of permissionless technology and mitigate risks in the traditional financial system, regulators need to strive for a thorough understanding of its core elements before implementing regulations. It is crucial to adopt a balanced approach that acknowledges the learning curve associated with this evolving field. Such an approach will enable effective risk management without impeding the growth of this emerging industry.
