On Thursday, the Republic of Marshall Islands showed its commitment to blockchain technology by passing a law that officially recognizes and embraces Decentralized Autonomous Organizations (DAOs) as legal Limited Liability Companies (LLCs). However, this event marks the first instance where a country has granted formal legality to DAOs.
As part of the new legislation known as ‘The Decentralized Autonomous Organizations Act 2022’, Marshal Island is also paving the way for wider global adoption and utilization of these innovative technologies with their advanced stance on cryptocurrency governance.
New legislation for DAOs and decentralized communities
The latest legislation passed in the Marshall Islands will grant DAOs or decentralized communities that drive crypto and blockchain projects with an internationally recognized LLC structure. To be eligible for this corporate name change, these organizations must incorporate “DAO LLC” into their title. Also, this law provides a unique opportunity for such digital entities to establish themselves as legitimate businesses internationally.
Not only do the Marshall Islands’ latest regulations cover both commercial and not-for-profit Decentralized Autonomous Organizations (DAOs), but they also recognize their internal administration protocols – such as voting on recommendations, tokenization, etc.
Marshall Island commits its resources to DAOs
The new legislation recently established an official registry process for the crypto communities, and MIDAO will be in charge of its administration. Also, this means those who desire to become LLCs on the island nation must undergo MIDAO’s onboarding procedures. In this way, the Marshall Islands DAO can guarantee legal security while promoting technological progress around blockchain technology within their jurisdiction.
In a statement, Finance Minister Brensen Wase declared that The Marshall Islands is extending its involvement in international business registration and compliance with the DAO law.
“We are proud to commit our judicial courts and assets to the burgeoning world of decentralization. This act signifies our commitment to the blockchain space and acknowledges how valuable decentralized autonomous organizations can be within the global economy.”Brensen Wase