EU regulators finalized MiCA crypto regulation and are working on a Data Act that could impose problematic requirements on smart contracts built on public blockchains, potentially hindering DeFi development across Europe.
The EU has published the Markets in Crypto Assets (MiCA) regulation, establishing regulatory clarity for digital assets and committing to assess decentralized finance. However, a parallel Data Act provision on smart contracts could impose unworkable requirements on blockchain-based smart contracts, including mandatory termination and interruption features. Smart contracts are critical infrastructure for DeFi, enabling efficient payments, lending, insurance, and automated transactions. The article advocates for clarifying the Data Act's scope to prevent damaging implications for the blockchain industry while supporting Europe's position as a significant international player in digital assets.
