The regulation grants crypto exchanges and wallet service providers permission to operate across the EU, but legislators purposefully avoided discussing the more challenging issue of how to govern decentralized finance . The Commission therefore will have to return to in a few years’ time.
There was still some uncertainty over whether the latest version of the Act still refers to “smart contracts” rather than alternative formulations suggested by the industry such as “digital contracts.”The Commission has dismissed concerns the blockchain industry raised, claiming that the new rule will not eliminate current smart contracts. The “high-level standards” it contains will not be difficult for vendors to implement in practice.
However, it is unclear if the final agreement would allay fears of the EU blockchain industry. There are concerns that the measures will be ineffective for public, permissionless blockchains, where there is no central authority to enforce regulatory constraints. The European Parliament and Council, which represent the bloc’s 27 member states, must vote in favor of the Act agreed upon by legislators so that it is passed into law.