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The European Parliament Passes Data Law with Implications for Encryption Industry

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The European Parliament Passes Data Law with Implications for Encryption Industry

It is reported that on Tuesday, local time, the European Parliament passed the relevant legislation of the Data Law with 500 votes in favour and 23 against. The legislation and its provisions on smart contracts are not specifically targeted at the encryption industry, but some people in the industry worry that if the scope is not clearly defined, the data law may have a far-reaching impact on encryption, especially in the area of smart contracts. It is reported that smart contracts belong to the provisions of Article 30 of the EU Data Law, namely “basic requirements for smart contracts for data sharing”. The provisions include “strict access control mechanism” and trade secret protection integrated into the design of smart contracts. It is necessary to have the possibility of terminating or interrupting the transaction mechanism, and the legislator needs to decide under what conditions it is allowed to terminate or interrupt the transaction. （The Block）

The European Parliament regulates smart contracts according to the data law

Analysis based on this information:


The European Parliament recently passed the Data Law, which has important provisions on smart contracts. While the legislation was not specifically aimed at the encryption industry, some industry insiders are concerned about its potential implications for encryption, particularly regarding smart contracts.

Smart contracts are covered under Article 30 of the EU Data Law, which outlines “basic requirements for smart contracts for data sharing.” This includes strict access controls and trade secret protection integrated into smart contract design. The law also requires mechanisms for terminating or interrupting transactions, which must be overseen by lawmakers to determine under what conditions a transaction can be halted.

The potential implications for the encryption industry are significant. Encryption is often used to secure sensitive transactions and data, and smart contracts are a newer technology built on top of encryption. The law’s focus on regulating smart contract design and execution could limit the scope of smart contract use for encryption purposes, or make it more complex and time-consuming to develop secure smart contract systems.

Another concern is that the legislation’s scope is not clearly defined. If lawmakers do not carefully define the scope of the law’s provisions, it could have far-reaching unintended consequences for the encryption industry. While the legislation itself does not target the encryption industry, its implications could be far-reaching.

Despite these concerns, the Data Law is an important step forward in protecting data privacy and security in the EU. By regulating smart contracts and other technologies that handle sensitive data, the EU is taking a proactive stance in protecting user privacy and preventing data breaches.

In conclusion, the Data Law has significant implications for the encryption industry, particularly regarding smart contracts. While the law’s provisions are not specifically aimed at encryption, its focus on regulating smart contract design and execution could limit the development and use of smart contracts for securing sensitive data. Additionally, the law’s scope is not yet clearly defined, which could lead to unintended consequences for the encryption industry. Despite these concerns, the Data Law represents an important step forward in protecting data privacy and security in the EU.

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