This article has been republished with permission from Binance News.
According to Cointelegraph, the European Central Bank (ECB) has suggested that decentralized autonomous organizations (DAOs) need a comprehensive regulatory framework to secure a place in the future of the financial sector. In an occasional paper titled ‘The future of DAOs in finance – in need of legal status,’ Ellen Naudts, Market Infrastructure Expert Payments at ECB, emphasized how technology has outpaced regulation in relation to DAOs, negatively impacting the safety and sustainable growth of the ecosystem.
The paper argues that enforcing a ‘registration framework that was built for a pen-and-paper era’ fails to address the various liabilities DAOs present to investors. It concludes that until DAOs are adequately regulated globally, their place in the financial sector of the future will remain limited. Concurrently, ECB executive board member Fabio Panetta has stated that the digital euro could ‘put Europe at the forefront of advanced economies.’ Panetta supported the European Commission’s legislative proposals for the digital euro, asserting that it would ensure Europeans always have access to a public payment option, whether cash or digital.