Establishes the “Decentralized Autonomous Organization (DAO) Act” that would position Rhode Island as a forward-thinking leader in blockchain innovation by giving DAOs clear legal status as limited liability companies.

Plain-English Summary: Rhode Island Decentralized Autonomous Organization (DAO) Act

This bill would create a new legal category in Rhode Island for organizations called Decentralized Autonomous Organizations, or DAOs. A DAO is a type of group that operates using computer code and blockchain technology — essentially a self-governing organization where rules and decisions are encoded into software rather than managed by traditional executives or boards. Right now, DAOs exist in a legal gray area, meaning they don't fit neatly into existing business structures. This bill would officially recognize DAOs as a type of limited liability company (LLC), giving them a formal legal standing under Rhode Island law.

By establishing this legal framework, the bill would allow DAOs to enter into contracts, own property, open bank accounts, and conduct business with the same legal protections that traditional companies enjoy. Importantly, members of a DAO would receive limited liability protection, meaning their personal assets (like their home or savings) would generally be shielded if the organization faces debts or lawsuits — similar to how a regular LLC works. This could encourage more blockchain-based businesses and projects to officially organize and operate within Rhode Island.

The bill would most directly affect technology entrepreneurs, blockchain developers, cryptocurrency investors, and anyone participating in or building decentralized online communities or financial platforms. It could also attract new businesses and tax revenue to the state. As of now, the bill has been referred to the House Corporations Committee and recommended for further study, meaning it has not yet been passed into law.