Pacific island nation passes into law the Decentralized Autonomous Organization Act of 2022, legally recognizing DAOs as domestic limited liability companies under the country’s existing laws, underscoring investment and exploration into decentralized ledger technologies
MAJURO, Marshall Islands, Dec. 22, 2022 (GLOBE NEWSWIRE) — In a world-first, the Republic of the Marshall Islands (RMI) announced today that the government has passed into law the Decentralized Autonomous Organizations Act of 2022, which legally recognizes DAOs and enables legal entities registered in the country to formally adopt DAO structures and governance tools. This development marks the furthest any country has gone in legalizing and encouraging the growth of decentralized entities and their associated elements, representing a unique opportunity for MIDAO’s facilitation of DAO Registry Process in the Marshall Islands.
The historic announcement comes amid growing calls for governments to introduce more regulatory oversight and scrutiny of blockchain and cryptocurrency. Following the collapse of the FTX centralized crypto exchange, many governments have announced plans for new legislation and beefed up enforcement from financial watchdog institutions. The government of the Republic of the Marshall Islands recognizes that a ‘one-size-fits-all’ approach will not work in this sector, and recognizes the benefits that decentralization can bring to its economy.
“The Republic of the Marshall Islands is proud to be at the forefront of tech jurisprudence and compliance globally. 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. We believe that our island nation is well-suited based on our history of shipping registration and compliance to take this step forward and offer DAOs a place to domicile easily, efficiently, and in a cost-effective manner,” said RMI Finance Minister Bransen Wase.
“We are in the midst of the blockchain revolution, and people all over the world are exploring new ways to organize and make decisions in a more efficient and egalitarian manner. Decentralized autonomous organizations present an enormous opportunity for people to organize in a more efficient and less hierarchical manner. We in the Marshall Islands recognize this unique moment to lead in this critical space,” said Bobby Muller, former RMI Chief Secretary, and President and Co-Founder of MIDAO.
The Decentralized Autonomous Organization Act of 2022 in the RMI legally accomplishes the following:
- Allows DAOs to incorporate under the internationally recognized LLC structure, so long as they identify as a DAO LLC;
- Allows for-profit DAOs and not-for-profit DAOs to register;
- Recognizes DAO governance, voting processes, and framework, including tokenization;
- Creates an investment fund for the government of RMI to continue education and training around DAOs and how to integrate them further into the economy;
- Provides definitions and regulations for DAO formation, agreements, and use of smart contracts.
In an effort to attract DAOs and Web3 pioneers, this newly passed legislation establishes a DAO registry process, to be facilitated by MIDAO, a local company with the expertise to attract and explain why the RMI legal system is more beneficial to DAO structures than other jurisdictions in the world.
“During this crypto reset moment following FTX, it is critical that people understand this event would not have happened if the exchange were decentralized – DAO structures could have prevented this from happening. We are honored to work with the government of the Republic of the Marshall Islands who clearly understands the value of decentralization and that legal systems should evolve at the pace of technology,” said Adam Miller, CEO of MIDAO.
MIDAO incorporates Decentralized Autonomous Organizations in the Marshall Islands, the only jurisdiction to recognize DAOs as they truly are – decentralized. MIDAO facilitates the process for DAOs by handling everything from setting up their legal entities, to providing a physical mailing address and submitting annual filings. MIDAO believes incorporation should be fast and easy so DAOs and their contributors can focus on building. MIDAO believes that DAOs represent the future of how humans organize ourselves and our resources.
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