Polygon Labs, the firm behind Ethereum’s most popular layer 2 scaling solution, has written an open letter to the European Parliament, the Council of the European Union, and the European Commission seeking clarification on the scope and intent of the Data Act. The primary objective is to keep permissionless systems away from the purview of said legislation. The Data Act has become crucial legislation for the tech space in Europe, and the proposed amendments seek to get permissionless technologies and their creators excluded from the scope of regulation. The letter highlighted problematic statements in the legislation and suggested amendments and clarifications accordingly.
Polygon stated that their interest in ensuring the growth and responsible development of permissionless blockchain-based systems globally prompted them to write to the policymakers of Europe. France-based crypto wallet maker Ledger was also a part of the letter. Polygon Labs’ Chief Policy Officer recently took to Twitter to comment on the letter. She explained that the proposed amendments would clarify that smart contracts aren’t agreements and that the Data Act would only be applicable to permissioned systems. According to the Chief Policy Officer, the proposed amendments will bring the legislation into alignment with MiCA’s exclusion of crypto-asset services.
The Data Act, which is a part of the Digital Single Market strategy, was proposed in 2017 and aims to create a single market for data in the European Union. It seeks to establish a regulatory framework for the free flow of non-personal data within the EU and to encourage data-sharing across sectors. The Act also aims to promote innovation and the development of new technologies while ensuring the protection of personal data.
The Act has been criticized for its broad scope, which could potentially include all smart contracts. Polygon Labs’ open letter seeks to clarify the scope of the legislation and ensure that permissionless systems remain outside its purview. The letter also highlights the need for a regulatory framework that is flexible and adaptable to the fast-evolving technology landscape.
The European Union has been at the forefront of regulating the blockchain and cryptocurrency industry. In September 2020, the European Commission proposed the Markets in Crypto-assets (MiCA) regulation, which seeks to establish a regulatory framework for crypto-assets and related services in the EU. The MiCA regulation aims to provide legal certainty and investor protection while promoting innovation and the development of new technologies.
The blockchain industry has been growing rapidly in recent years, and the need for regulatory clarity has become increasingly important. The European Union’s efforts to regulate the industry have been welcomed by many in the blockchain and cryptocurrency community. However, there is also a need for regulatory frameworks that are flexible and adaptable to the fast-evolving technology landscape.
Polygon Labs’ open letter to the European Parliament, the Council of the European Union, and the European Commission seeks to ensure that the Data Act does not stifle innovation and growth in the blockchain industry. The proposed amendments would clarify the scope of the legislation and ensure that permissionless systems remain outside its purview. The letter highlights the need for a regulatory framework that is flexible and adaptable to the fast-evolving technology landscape.