The Republic of the Marshall Islands has announced it will allow decentralized autonomous organizations (DAOs) to become legal entities. At the time of writing, only one DAO has successfully incorporated in the country.
DAOs Will Be Allowed to Register as Legal Entities
The Republic of the Marshall Islands (RMI) has said it will allow decentralized autonomous organizations (DAOs) to register as legal entities. The move, which has been made by the recent passage of the Non-Profit Entities (Amendment) Act 2021, makes it possible for DAOs to be “recognized by the international legal system.”
According to a recent media release, the island nation has already established a domestic organization, MIDAO Directory Services Inc., to help DAOs register as legal entities within the Marshall Islands. The media release adds that MIDAO was involved in the successful incorporation of Shipyard Software’s Admiralty LLC, an entity that builds “decentralized exchanges for specific types of trades, traders, and instruments.”
In justifying the country’s decision to recognize DAOs, the media release points to the RMI’s track record in the sphere of regulatory compliance.
“The RMI’s track record of regulatory compliance and fair legal adjudication is recognized worldwide, and the country is well-positioned to become the leading domicile for DAOs in the world,” explained the media statement.
De Facto Choice for DAOs
Similar to the U.S. state of Delaware, which “has become synonymous with incorporation” within that country, the Marshall Islands said in the statement that it is attempting to become “the de facto choice for DAOs interested in legally registering their organization.”
Meanwhile, the media release also quotes Bobby Muller, president and co-founder of MIDAO, who acknowledges that DAOs “present an enormous opportunity for people to organize in a more efficient and less hierarchical manner.” According to Muller, the island nation sees its decision to formally recognize DAOs as a “unique moment to lead in this critical space.”
What are your thoughts on this story? You can share your views in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.