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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 ârecognized by the international legal system.â
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 Softwareâs Admiralty LLC, an entity that builds âdecentralized exchanges for specific types of trades, traders, and instruments.â
In justifying the countryâs decision to recognize DAOs, the media release points to the RMIâs track record in the sphere of regulatory compliance.
âThe RMIâs 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,â explained the media statement.
De Facto Choice for DAOs
Similar to the U.S. state of Delaware, which âhas become synonymous with incorporationâ within that country, the Marshall Islands said in the statement that it is attempting to become âthe de facto choice for DAOs interested in legally registering their organization.â
Meanwhile, the media release also quotes Bobby Muller, president and co-founder of MIDAO, who acknowledges that DAOs âpresent an enormous opportunity for people to organize in a more efficient and less hierarchical manner.â According to Muller, the island nation sees its decision to formally recognize DAOs as a âunique moment to lead in this critical space.â
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