Europe Votes to Challenge Immutability of Smart Contracts

European Parliament Votes in Favor of Challenging Smart Contract Immutability

  • The European Parliament has voted in favor of proposed legislation that will challenge the immutability of smart contracts.
  • The legislation was passed with 500 votes in favour and 23 against, and could affect decentralized finance (DeFi).
  • Confusion and uncertainty have been raised over the Data Act, with critics saying it would be „impossible to comply.“

Details on Proposed Legislation

Under the new Data Act, smart contracts will be subject to „harmonized standards“ defined in the Act. Article 30 includes provisions such as „rigorous access control mechanisms at the governance and smart contract layers“ and protections of trade secrets integrated into the design of smart contracts. Smart contract developers may need to design reset possibilities to allow termination or interruption of transactions.

Criticism Over New Regulations

The revised version of the bill has drawn criticism from the DeFi community, who say it would be „impossible to comply.“ Thibault Schrepel, an associated professor at VU University Amsterdam, said Article 30 does not provide clarity as to who should be able to ‚terminate the continued execution of transactions.‘ Is it the creator of the smart contract? Public authorities? Courts?

Implications for Crypto Industry

Although not directed specifically at crypto, this proposed legislation could have implications for cryptocurrency industry. The regulations mean that smart contracts must be designed with a possibility for them to terminate or interrupt transaction mechanisms. This could create confusion among users about which rules apply for their use cases and add another layer of compliance onto blockchain projects.


With 500 votes in favour and 23 against, this proposed legislation is set to challenge immutability within smart contracts, potentially impacting DeFi projects. Critics have raised confusion over this bill due its lack of clarity around certain provisions such as who should be able terminate or interrupt transaction mechanisms within a smart contract. It remains unclear what implications this bill might have on cryptocurrency projects within Europe but it is likely that further clarification will come in time.