At a panel at this year’s World Economic Forum, Finland’s communications minister made a statement for some altcoins. He said the European Union should consider legislation to recognize decentralized autonomous organizations (DAOs) that manage Web3 applications.
Finland’s Communications Minister takes aim at DAOs
Finnish Communications Minister Timo Harakka pointed to decentralized autonomous organizations (DAOs). He thinks the EU should consider legislation to recognize DAOs. He said this move could avoid the need to change thousands of laws or countries that underline each other in the race to attract innovative businesses. “There are a lot of new players and actors in the web3 world… These are not well reflected in the current laws. Take a DAO for example: Where does the legislation stand?” says.
Harakka said the new centralized laws could prevent the fragmentation of Europe’s legal codes, but the European Commission, which is responsible for proposing new EU laws, has other eyes on it. Harakka said it is necessary to “think multinationally” to avoid “harmful regulatory competition” among the bloc’s 27 members and not have to individually change thousands of different laws governing different types of contracts. He pointed to the Crypto Assets (MiCA) legislation, which, if adopted, would create a uniform standard for each country.
These altcoins need regulation
While he said “we trust the European Commission to be the lead” and “look forward to its work”, the metaverse said he doesn’t know if there will be any regulation for DAOs. “With DAOs, it takes a different logic to regulate,” Harakka said. Here are some altcoins from the DAO projects that Harakka pointed out:
He said Europe was “obsessed” with other issues, such as how to control online privacy, but added that “extraordinary and groundbreaking legislation will pave the way for Web3.” Regulators around the world are struggling over how to classify and regulate decentralized initiatives, such as financial applications where there is no central lender. Some argue that decentralization is a myth because in practice there is always someone in control.
In the UK, on the other hand, the Law Commission for England and Wales has published a consultation on how to address structure, governance and taxation issues. While some policymakers have argued that it may be too soon to set rules for decentralized finance, Harakka argued that it is time to at least start thinking about a philosophical approach to the issue. It took the blog two decades to figure out how to regulate online data streams, and Harakka noted that it “may take some time” to regulate smart contracts.
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