The EU should discard or miss inappropriate GDPR rules for blockchain

Last month, the European Data Protection Commission (EDPB) quietly published guidelines 02/2025 on the processing of personal data through blockchain technology. Buried in paragraph 63 are lines that shake up the entire Web3 stack. “If deletion is not considered by design, you may need to delete the entire blockchain.”

That one clause converts GDPR from the global privacy gold standard to kill switches for every permitted network. Yes, that includes Bitcoin (BTC), Ethereum (ETH), and hundreds that will calm trillions of dollars a year.

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The reality is worse than it looks, as deleting all nodes is the only sure way to “forget” a transaction. This guideline makes it effective for non-compliance by default for unauthorized networks. Public consultations will end on June 9th. The text then clings to the European Enforcement Playbook. The future of Europe is then set.

GDPR was never written for tamper-proof ledgers

The 2018 GDPR authors assume that the data resides on a central control server that can be erased by a single operator. Fast forward from modern public blockchains. The opposite is true. Blockchain is decentralized, immutable, borderless.

Public chains rely on thousands of independent nodes that jointly guarantee history. Rewriting a block destroys its integrity, so Article 17’s “right to be forgotten” clashes the blockchain with its very trustworthy functionality.

Techniques such as salted hashing, zero knowledge proof, and off-chain data pointers minimize or obfuscate personal information. There is little to no new drafts allowed. Instead, we assume that we can identify a single “data controller.” This is another concept that undermines decentralization and the integrity of permitted networks.

Sovereign Cloud’s ambitions are at risk

For two years, Brussels has promised sovereignty cloud, or digital autonomy in European terminology. The committee’s latest policy goals are clear. By 2030, three-quarters of EU businesses will need to run cloud edge technology. 10,000 climate-neutral edge nodes must be live, and future cloud and AI development laws pledge to triple the EU’s target = “_ blank” rel = “nofollow”>hold around 70% of the European cloud market. Members of the European Parliament warn that without the indigenous backbone, EU data will remain US subpoena away from offshore exposure.

The only architecture that can realistically break grips is a distributed cloud, a decentralized cloud in which infrastructure providers are coordinated by blockchain incentives and data stays within European data centres. If EDPB makes these ledgers illegal by design, Brussels claims it will end up very reliance on its dependency.

Paragraph 63 kneels European builders

Whenever a single record cannot be erased, by threatening the deletion of all chains, the draft injects existential risk into all European Web3 projects, symbolizing future venture financing. That bias against permitted ledgers says developers are opposed back to centralized silo policymakers.

Labeling the volunteer validator “Data Controller” saddles enthusiasts who take responsibility for corporate grade, reduce node participation and weaken network security. Treating all peer-to-peer links as a risk of regulated international relocation divides global consensus behind borders.

Requiring human overrides for smart contracts breaks complexity and undermines everything from decentralized finance to reporting environmental social and governance on the chain.

A joint call for action from the European Crypto Initiative (EUCI) and Web3Privacy warns that the draft guidelines “will fundamentally threaten the existence of public blockchains” across Europe. Should the EU make its own builder kneel by including this paragraph?

No beats per privacy

The cleaner path retains both privacy and decentralization. Destroy the encryption key or prove with zero knowledge that the irreversible key meets the intent of Article 17 without dismantling the ledger. The guidelines should recognize encryption deletion along with physical erasure, and state that a 32-byte on-chain hash treats the valtter as a processor rather than a “controller” rather than a “controller.”

Brussels has already shown that the cryptographic technology regulations can be created through the market, with Frontier Tech’s bespoke rules without banning blankets. Attacking the kill switch text, codifying the removal of dust from keys, and clarifying the status of the validators, will live up to the GDPR to technical reality, all European sovereign cloud strategy.

The public comment portal will be closed less than a month, and unless paragraph 63 is rebalanced, Europe risks spending the next decade paying US hyperscalers to host “sovereign” data. Meanwhile, the rest of the world is built on rails that provide auditable privacy beyond the scope of Brussels.

As time runs out quickly, builders, investors and policymakers should now hit that comment portal before Europe locks its own digital future.

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