<\/p>\n
Decentralized autonomous organizations (DAOs) need a comprehensive regulatory framework if they are to make a place in the future of the financial sector, suggests the European Central Bank\u2019s Occasional Paper (OP).<\/p>\n
The OP \u201cThe future of DAOs in finance – in need of legal status,\u201d authored by Ellen Naudts, market infrastructure expert payments at the ECB,\u00a0highlighted<\/a> how technology outpaced regulation in relation to DAOs, having a negative impact on the safety and sustainable growth of the ecosystem. <\/p>\n As DAOs continue to flood the market with unique offerings, enforcing a \u201cregistration framework that was built for a pen-and-paper era\u201d fails to address the various liabilities they present to investors.<\/p>\n \u201cUntil DAOs are adequately regulated globally, in the sense that the abovementioned\u00a0challenges have been solved so that they do not and will not in future pose a serious\u00a0threat to financial stability, payments and securities systems operate smoothly and\u00a0consumers are properly protected, the place for DAOs in the financial sector of the\u00a0future will necessarily remain limited,\u201d the paper concluded.<\/p>\n Related: <\/em><\/strong>ECB official labels crypto as \u2018deleterious\u2019 with \u2018no societal benefits\u2019 in scathing speech<\/em><\/strong><\/a><\/p>\n Concurrent with calls to establish a regulatory framework, ECB executive board member Fabio Panetta recently said the digital euro could \u201cput Europe at the forefront of advanced economies.\u201d<\/p>\n A digital euro would be a new form of central bank money, says Executive Board member Fabio Panetta. It is now up to legislators to ensure it would replicate key characteristics of cash in the digital sphere, particularly its privacyhttps:\/\/t.co\/nQJzYylwpV<\/a><\/p>\n 1\/3 pic.twitter.com\/4XPlk83Lwj<\/a><\/p>\n \u2014 European Central Bank (@ecb) September 4, 2023<\/a><\/p><\/blockquote>\n Panetta supported the European Commission\u2019s legislative proposals for the digital euro, stating that it would ensure Europeans always have access to a public payment option, whether cash or digital, even as \u201cclosed-loop solutions are becoming increasingly prevalent\u201d in private payment services.<\/p>\n\n