European Union's financial regulations are becoming increasingly strict. MiFID II, MiCA, DLT pilot schemes… one after another, they seem cumbersome and overwhelming. But these regulations are actually like a ruler — capable of measuring which blockchain projects can truly be implemented within formal financial institutions.

In simple terms, many projects claim to be "compliant," but in reality, they just put a label on themselves. The real test is whether they can embed regulatory requirements into code. The Dusk Foundation team has been doing this for eight years, focusing on exactly that.

How do they do it? Starting from the ground up. For example, MiFID II's requirements for transaction transparency usually mean financial institutions must keep complete transaction records. But on the blockchain, how do you protect privacy while allowing regulators to audit clearly? Dusk's solution is to create an "auditable privacy ledger" at the Layer 1 settlement layer — using zero-knowledge proofs to hide user identities, yet enabling the export of standardized transaction records for regulatory review as needed. It sounds simple, but such a design requires a deep understanding of financial regulatory frameworks and cryptography.

Looking at MiCA's requirements for the qualifications of crypto asset service providers — which involve identity verification, anti-money laundering, risk management, and a full set of processes — Dusk has translated these into specific product modules. Their Dusk Pay and Dusk Vault are not just for show; they are practical tools that enable European financial institutions to use them. Coupled with technologies like SBA consensus mechanism and zero-knowledge proofs, the entire ecosystem is gradually taking shape.

The difficulty lies in the fact that this cannot be replicated in the short term. Eight years of accumulation, communication with regulators, iterative technical solutions… all these form insurmountable barriers. In the compliance track, Dusk has already gained an early advantage.