A proposed California law could give official standing to Decentralized Autonomous Organizations (DAOs). The bill, known as AB 2150, would provide clarity on how DAOs would be recognized under state law, empowering them to operate legally and with increased legitimacy. If passed, California could become the first state to establish a legal framework for DAOs, potentially paving the way for other states to follow suit. This move could also lead to broader acceptance and mainstream adoption of blockchain-based technology as a whole.
California Could See Legal Framework for Decentralized Autonomous Organizations (DAOs)
California, famed for its tech-friendly attitude, is considering a legal framework around decentralized autonomous organizations (DAOs). Assemblymember Matt Haney of San Francisco introduced Assembly Bill 1229 on Monday, which aims to change the state’s corporate code to include DAOs, blockchain networks, and smart contract protocols. Andreessen Horowitz, a well-known crypto investment firm, and the Crypto Council for Innovation have already thrown their support behind it.
Miles Jennings, General Counsel at a16z crypto, expressed his approval, stating, “We have long been supportive of reasonable regulation that puts guardrails in place while giving innovators the certainty they need to keep building, which is exactly what this legislation does.” California’s support for this kind of framework certainly says a lot for the state as a leader in high-tech.
DAOs are organizational structures where control is distributed among members, with governance tokens used to vote on proposed actions, allowing for a decentralized decision-making process. Assembly Bill 1229 would enable DAOs to incorporate in California and pay taxes, while profiting from better protection for Californians looking to participate in the Web3 economy.
The bill also comes at an opportune moment, with government regulators and officials worldwide regulating cryptocurrency. A crypto crackdown took place in the US after FTX’s collapse in November, led by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Crypto projects have also been put under the scrutiny of state regulators. Thus, regulation around DAOs and Web3 technology will provide better stability for California’s tech industry, as Haney put it, “It would be devastating to both our economy and our identity as a state to lose California’s place as the world’s tech leader because our laws are not keeping up with the times.”
In conclusion, California is raising the bar, showing the world that it is ready to lead forward in Web3 regulation, with Assembly Bill 1229 as its first piece of legislation aimed at that direction. An informative bill that educates and addresses the complex topic of DAOs, bringing Assembly up to speed, creating certainty, legitimizing DAO’s organizational type, and ensuring appropriate taxation.