Marshall Islands Passed Decentralized Autonomous Organizations Act

Marshall Islands

Crypto regulations remained among the hot topics around the space and it holds debatable points for both its support and opposition. Recently Brazil was reported to pass the law making bitcoin (BTC) payments legally recognized in the region. Independent island state the Republican of the Marshall Islands also announced passing a law: Decentralized Autonomous Organizations Act of 2022. 

The law will bring the decentralized autonomous organizations a recognition while enabling registered legal entities within the country to go for formal adoption of governance tools and structures of DAO. The bill is anticipated to increase the growth of decentralized firms along with the complementary elements in the region. 

DAOs would not be incorporated as limited liability companies (LLCs) within the state as per the announcement of the DAO Act. This will enable them to get identified as DAO LLCs. 

Both for-profit and non profit DAOs would be allowed to register while providing the definitions and regulations related to forming a decentralized organization along with the agreements and use of smart contracts. 

In addition, forming an investment fund specifically for the Marshall Islands government in order to fund the education and training for the DAOs and the ways through which they could be included with the economy. 

“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 Bransen Wase, the Republic of the Marshall Islands finance minister. 

The Marshall Islands officially recognised DAOs as legal companies in February, allowing them to register and start doing business there. By enabling organizations to incorporate as DAO LLCs and identify as such, the new regulation goes beyond this.

The Marshall Islands has been actively investigating use cases for digital assets over the past few years, and the government has taken steps to develop a blockchain-based cryptocurrency called Sovereign (SOV).