How does encryption affect the scope of PCI DSS?

When cardholder data is encrypted, it effectively transforms the sensitive information into a format that cannot be easily read or misused without the appropriate decryption keys. This process creates a layer of security that can help segregate the sensitive data from non-encrypted systems and areas within an organization.

As a result, the scope of PCI DSS can be reduced because encrypted data does not need to be treated in the same way as unencrypted cardholder data. When the data is stored or transmitted in an encrypted form, businesses may be able to limit the systems that need to be included in their PCI DSS assessment, focusing compliance efforts primarily on the areas where unencrypted cardholder data is handled or processed.

This is why the correct choice emphasizes the positive impact of encryption on reducing the compliance burden in terms of identifying which systems need to adhere to the full PCI DSS requirements. It highlights a strategic advantage in managing PCI compliance by implementing encryption as a data security measure.