The new act aims to provide a regulatory environment to DAOs and enable the economy to derive benefits from the same.
The crypto industry received some major good news prior to the holiday season from The Republic of Marshall Islands as the country announced the passing of a new act, incentivizing DAOs. The Decentralized Autonomous Organizations Act of 2022 would allow decentralized autonomous organizers to legally register themselves as a limited liability company, which is a major breakthrough for DAOs operating in the country.
Further, the law would enable other legally registered organizations to adopt DAO protocols and allow nonprofit DAOs and for-profit DAOs to register under a fully detailed regulatory environment. An investment fund would also be allowed to be created, eventually creating more opportunities for research and education in the decentralized technology space and allowing for further integration of DAOs with the economy. It was noteworthy that DAOs have received full government cooperation in the process.
“With this adoption of the DAO Act of 2022, The Marshall Islands commits its courts and its resources to the burgeoning world of decentralization, and recognizes the unique place that decentralized autonomous organizations can hold not just in the blockchain space, but in the broader economy as well,” said the finance minister of the country, Bransen Wase. The move by The Republic of Marshall Islands is a welcome step as the crypto industry further awaits regulations from countries worldwide in 2023. The DAO act is expected to enable other regulatory authorities around the world to frame similar acts for the crypto space.