New California Law Makes DAO An Acceptable Business Entity
- California has drafted a bill to provide a regulatory framework for making the DAO an acceptable business entity.
- Council Bill 1229 would change California’s corporate code to include DAOs, blockchain networks, and smart contract agreements.
- If passed, DAOs would be registered and taxed and would provide better protections for Californians to participate in the Web3 economy.
According to Decrypt, Congressman Matt Haney of San Francisco, California, has drafted a bill to provide a regulatory framework for making the DAO an acceptable business entity.
An organizational form known as a decentralized autonomous organization (DAO) distributes power among its members. Decentralized decision-making is made possible through the DAO’s usage of blockchain smart contracts, governance tokens, and voting participants.
A regulatory framework for Decentralized Autonomous Organizations (DAOs) could be coming to California. San Francisco Councilmember Matt Haney introduced Council Bill 1229 on Monday, which already has support from prominent crypto investment firm Andreessen Horowitz (a16z) and the Cryptocurrency Innovation Council death.
“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,” Miles Jennings, General Counsel at a16z crypto, told Decrypt.
DAOs, blockchain networks, and smart contract agreements would all be included in Council Bill 1229, which would amend California’s corporation code. If approved, the proposal will enhance Californians’ participation in the Web3 economy while allowing DAOs to register and pay taxes in the state.
According to the spokesperson, the new bill aims to educate its colleagues on the basics of blockchain, California corporations, and the operation of Decentralized Autonomous Organizations (DAOs).
The introduction of the law coincides with the launch of cryptocurrency regulators’ and governments’ official websites throughout the globe. The collapse of FTX in November led to a crypto crackdown in the US, which was coordinated by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Additionally, state officials have increased their monitoring of bitcoin initiatives.
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