Wyoming has created a piece of legislation that will recognize Decentralized Autonomous Organizations (DAOs) as legitimate enterprises in the United States. On March 18th, the Wyoming Senate voted 28-2 to push a law that many are calling ‘the Wyoming DAO bill’, to Wyoming’s house of representatives, where it will be voted on next.
What does this mean?
Wyoming’s DAO bill will make it possible to create and register a DAO in Wyoming; this means that DAO’s will be recognized on the state and federal level as legitimate organizations, similar to a business that registers as an LLC or a corporation.
Aaron Wright, a professor at Cardozo Law School that helped draft the bill says that if the law passes, we should see “millions, if not billions, of DAOs bloom.”
According to Wright, “Wyoming is exploring creating an API that presumably would enable folks to register DAOs. If so, in the not-so-distant future, folks will be able to set up their organizations from [the] command line.”
As a result,
“Setting up a legally recognized DAO could cost **hundreds of dollars** instead of tens of thousands of dollars (at least in the US).”
Decentralized Autonomous Organizations are a relatively new type of organization and have a very unique structure. That being said, there are no laws that recognize and define a DAO the same way there are laws that recognize and define business structures like LLCs and corporations–but Wyoming’s DAO bill can change this. It could also lower the cost of getting a DAO legally recognized since you will be able to register through a website rather than hire a legal team to have you registered.
Will Wyoming be the ‘Crypto Valley’ of the USA?
Wyoming is arguably the best location in the United States to register your blockchain or digital currency business; Wyoming is encouraging innovation happening within both industries and the legislation coming out of Wyoming reflects that.
Kraken was able to become the first federally chartered digital currency bank in the United States thanks to Wyoming’s law; and at the rate that Wyoming lawmakers are creating crypto-friendly legislation, it would not be surprising to see more blockchain and digital currency businesses set up shop in Wyoming.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.