Lack of a regulatory framework limits the potential of DAOs: ECB Occasional Paper
In the ever-shifting landscape of regulatory uncertainties, the sustained evolution of the DAO ecosystem faces headwinds, as unveiled by a recent Occasional Paper from the European Central Bank. The Occasional Paper, titled “The future of DAOs in finance – in need of legal status,” penned by Ellen Naudts, an expert in market infrastructure payments at the ECB, underscores the imperative for a robust regulatory framework for decentralized autonomous organizations (DAOs) to carve their niche in the future financial realm. The paper emphasizes how the swift advancement of technology has outpaced regulatory measures concerning DAOs, negatively impacting the safety and long-term viability of the ecosystem. As DAOs inundate the market with innovative propositions, the existing “pen-and-paper era” registration framework proves inadequate in addressing the diverse risks they pose to investors. The paper concludes that until a comprehensive global...