ECB says the future of DAOs will be ‘limited’ due to lack of regulatory framework

Uncertain regulatory conditions are hindering the growth of the DAO segment. This is stated in a study by the ECB.

Regulators’ analysts highlighted the need for a comprehensive regulatory framework. Only then will the DAO have the opportunity to secure a place in the future financial sector, they added.

At present, technology is outpacing regulation of the segment, undermining security and sustainable growth of the ecosystem, the document says. The study provides an overview of the sector’s development.

According to experts, existing legislation does not address the growing number of specific problems that such structures create for investors.

“Until DAOs are properly regulated worldwide …— they will not pose a threat to financial stability, will not hinder the operation of payment and securities systems, and will not create barriers to proper consumer protection— the place for DAOs will be limited,” says the document.

As reported in April, the European Parliament voted in favour of a bill to comprehensively regulate the crypto industry MiCA.