Blockchain devs expect complications from EU smart contract kill switch

cointelegraph.com:

The Data Act — a contentious piece of European Union legislation that includes a clause requiring the ability to terminate smart contracts — has been approved by the European Parliament. If introduced, the legislation will require a smart contract to have a “kill switch.”

In a Nov. 9 press release, the parliament announced that the legislation was passed with 481 votes in favor and 31 against. The next step for it to become law is to gain the approval of the European Council.

In its current form, the Data Act stipulates that smart contracts must have the capability to be “interrupted and terminated,” and it mandates controls that allow for the resetting or halting of the contract. The stipulation appears to be a significant departure from the blockchain’s foundational ethos of decentralization.

How such kill switches would be implemented, and how they could impact the development and use of smart contracts remains unclear. Scott McKinney and Laura De Boel, attorneys with Wilson Sonsini Goodrich & Rosati, told Cointelegraph that such a kill switch is “fundamentally incompatible with what a smart contract is” and how it’s viewed.

They added that the definition of a smart contract included in the Data Act is “overbroad” and likely to encompass computer programs that wouldn’t currently be considered a smart contract. They added:

Given the EU’s requirements — including the kill switch and data archiving obligations — they suggested that many companies entering applicable data sharing agreements “will simply decide not to use smart contracts in their applications.”

Gracy Chen, managing director at cryptocurrency exchange Bitget, told Cointelegraph that the implementation of such a kill switch “introduces a centralized element,”