The law enables legal entities registered in the country to formally adopt DAO structures and governance tools.
The Republic of the Marshall Islands, AN independent island state located within the Pacific Ocean close to the Equator, has announced that the decentralized Autonomous Organizations Act of 2022 has officially been passed into law.
The law acknowledges decentralized autonomous organizations and permits legal entities registered within the country to formally adopt DAO structures and governance tools. the government hopes the move can encourage the expansion of decentralized entities and their attendant elements within the state.
According to the announcement, the DAO Act of 2022 can allow DAOs to incorporate as limited liability firms (LLCs), enabling them to identify as DAO LLCs. The act is additionally poised to permit both for-profit DAOs and nonprofit DAOs to register while providing definitions and regulations for DAO formation, agreements and use of smart contracts. additionally, the novel act allows for the creation of an investment fund for the govt of the Marshall Islands to continue education and training around DAOs and their integration into the economy.
The finance minister of the Republic of the Marshall Islands, Bransen Wase, shared: “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 acknowledges the distinctive place that decentralized autonomous organizations will hold not simply within the blockchain house, however within the broader economy moreover.”
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Feb, the Marshall Islands formally recognized DAOs as legal entities, permitting them to register and establish operations within the country. The new law goes on the far side this by permitting entities to include as DAO LLCs and identify as such.
Over the past few years, the Marshall Islands has been actively exploring use cases for digital assets, with the government introducing measures to create a blockchain-based cryptocurrency dubbed Sovereign (SOV).
(JUDITH BANNERMANQUIST, Cointelegraph, 2022)