DAOs, or decentralized autonomous organizations, have faced legal turmoil in many countries. Due to their decentralized mode of operations, many authorities and regulators have raised questions about the credibility of such organizations. Nonethesll, DAOs have continued to grow in strength and are now an extremely important component of the crypto ecosystem. In what is positive news for the crypto community, the Republic of Marshall Islands has formally recognized DAOs as legal entities. Under the new law, any DAO can register itself in the island country and enjoy legal status. It came into effect after the passing of the Non-Profit Entities Act 2021.
Under this act, DAOs enjoy legal autonomy and recognition in the tiny island-country of the Marshall Islands. As a result of this move, Shipyard Software will be able to incorporate Admiralty LLC. Admiralty LLC is the country’s first decentralized autonomous organization. MIDAO Directory Services Inc. is the domestic body that helps DAOs register themselves in the country. Bobby Muller, the co-founder of MIDAO and former government official, expressed his enthusiasm at the new step taken by the Marshall Islands. According to him, it is an important moment for the blockchain revolution and paves the way for further innovation.
To understand how the Marshall Islands could make this move, we need to look at it from a geopolitical perspective. With a population of less than 60,000, the island country has fewer people than many towns in other countries. It affords them the chance to innovate with more caution and approach it with a trial-and-error mindset.