UAE to Establish Legal Framework for DAOs

The UAE plans to introduce a legal framework for decentralized autonomous organizations (DAOs) within the RAK DAO. This was reported by Cointelegraph, citing a letter from the law firm NeosLegal.

The presentation and discussion of the new regime with representatives of the free economic zone is scheduled for October 25. Irina Heaver, a partner at NeosLegal, stated that this will have a significant impact on decentralized governance and the broader Web3 ecosystem in the UAE.

The proposal will cover legal and governance requirements for DAOs, including the creation of a legal structure. The rules will also clarify tax obligations and benefits, allow ownership of digital assets, and provide legal protection from personal liability for founders, participants, and contributors of the organizations.

The new regime will permit DAOs to enter into legal contracts and establish principles for resolving internal and external disputes.

A decentralized autonomous organization can register in the UAE without physical presence in the country and open bank accounts, Heaver noted. The cost of establishing an organization starts at $3,000, which is significantly lower than the Swiss requirements of up to $46,000.

Earlier, the UAE Central Bank granted AED Stablecoin preliminary approval to issue a dirham-based stablecoin, AE Coin, in accordance with the Payment Token Services Regulation. If fully approved, AE Coin could potentially become a settlement unit in pairs with cryptocurrencies on CEX and DEX, as well as a payment method among merchants.

Back in August, Tether announced plans to develop a “stablecoin” pegged to the dirham.