Last Updated on 2 hours by John Piper

The Republic of the Marshall Islands has passed a law that allows businesses to form decentralised autonomous organizations (DAOs) informally.

The Decentralized Autonomous Organizations Act of 2022 recognizes the benefits of DAOs, and the government hopes to encourage the growth of more DAOs throughout the country. According to a press release, the DAO Act will allow companies to register as limited liability corporations (LLCs) under the law. They will then be able register and operate DAO LLCs. The company will be defined by the act and regulations when it is registered as a DAO LLC.

This is in response to the collapse of FTX, a centralised cryptocurrency exchange that saw the entire industry shaken about central control over the blockchain and crypto industries. Adam Miller, CEO of MIDAO:

This act will also improve regulatory infrastructure. The country will have decentralised finance (DeFi). The law will allow for-profit and not-for-profit organizations to register as DAOs, according to the announcement. This is part of an effort by the government to attract Web3 “pioneers” and DAO developers to the country. MIDAO will facilitate the DAO Act. This aims to show why DAO structures in the Republic of the Marshall Islands will function due to the RMI legal system.

Companies can register as a DAO to enable decentralised governance. This includes voting protocols on blockchain and tokenization of assets.

Bobby Muller, President of MIDAO and Co-Founder, noted that the announcement was made:

“We are at the forefront of the blockchain revolution and people around the world are looking for new ways to organize and make decision in a more efficient, egalitarian way. People have a huge opportunity to create autonomous, decentralized organizations that are more efficient and less hierarchical. The Marshall Islands recognize this momentous opportunity to lead in this crucial space.

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