EU official: The smart contract plan of the European Parliament limits the development of unified standards

On March 15th, Thierry Breton, the EU’s internal market specialist, told reporters on Tuesday that controversial EU regulations require “termination switches” to be set for certain smart contracts, which may limit the key ability to set standards for the industry.

Interpretation of this information:

The European Union (EU) has been working on regulations that would require “termination switches” in certain smart contracts. According to Thierry Breton, the EU’s internal market specialist, these regulations have become controversial, as they may restrict the ability to set standards for the industry. The concept of smart contracts created excitement in the blockchain industry due to their self-executing and autonomous nature. These smart contracts are coded to execute when certain conditions are met, automating processes across various industries. The EU’s regulations, however, would give the power of termination to human operators, which could significantly reduce the autonomy of smart contracts.

The EU’s regulations might limit the adoption of smart contracts and impede its technological advancements, as the key ability to set standards for the industry would be limited. Termination switches could potentially compromise the integrity of smart contracts, as it raises concerns on who has the power to terminate contracts and why. It could also open doors to corrupt practices and put the fairness of contracts into question. These switches could be used to manipulate the outcome of a contract in favor of one party, leading to legal disputes that could compromise the validity of smart contracts.

The controversy surrounding the EU’s regulations on smart contracts is an issue that needs to be addressed before it can be broadly adopted. The EU needs to work with blockchain companies, legal experts, and regulatory bodies to develop standards that ensure the fairness, security, and reliability of smart contracts. One solution could be incorporating specific rules into smart contracts’ code to limit manipulation or exploitation possibilities.

In conclusion, the EU’s regulations requiring termination switches for smart contracts could potentially limit the industry’s growth and impede its ability to set standards. This could raise concerns on who has control over the termination of contracts and the fairness of the processes involved. However, the controversies surrounding its application could be addressed by developing more stringent standards in the blockchain industry.