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Strong Customer Authentication

Definition ∞ Strong Customer Authentication (SCA) is a security requirement that mandates the use of at least two independent authentication factors to verify a user’s identity. These factors typically belong to different categories, such as knowledge (something only the user knows), possession (something only the user has), and inherence (something the user is). SCA aims to reduce online fraud and enhance transaction security.
Context ∞ In the context of digital assets, SCA is increasingly relevant as regulators seek to apply traditional financial security standards to cryptocurrency services. News often covers how exchanges and payment providers are implementing SCA protocols to comply with directives like PSD2 in Europe. Adherence to SCA helps protect user funds and build confidence in digital asset platforms.

A sleek, white and metallic blue industrial mechanism features interconnected components, suggesting precision engineering and automated functionality. This modular system evokes the intricate design of a decentralized autonomous organization DAO or smart contract execution engine. Its linear guides and robust structure symbolize the immutable records and trustless environments foundational to distributed ledger technology DLT. The assembly could represent a validator node or a component within a layer-2 scaling solution, facilitating transaction finality. Abstract markings hint at complex cryptographic primitives or hashing algorithms underpinning Web3 infrastructure, articulating robust protocol layers for secure digital asset management.

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EU Legislators Agree Payment Services Regulation Shifting Fraud Liability

The EU's new payment framework shifts fraud liability to Payment Service Providers, mandating immediate system overhauls for all digital asset payment rails.