Specialists and lawyers focused on decentralized finance (DeFi) are launching an initiative to create a new type of legal entity in Australia representing decentralized autonomous organizations (DAOs).
The country’s Digital Law Association and global law firm Herbert Smith Freehills are lobbying an Australian Senate committee to formally recognize new decentralized models for corporate governance. These new DAO models would replace the board of directors with an internet community, the Australian Financial Review reported Thursday.
The initiative specifically intends to allow “DAO Limited” project governors to contract with other legal entities through DeFi tools implementing blockchain technology to remove traditional intermediaries like banks and exchanges. Limited liability status will also prevent Australian members of a DAO from being liable for losses incurred by decisions made by a member of the community.
According to the lawyers, legalizing DAOs in Australia could make the country more attractive for global digital asset businesses as groups of local DeFi entrepreneurs reportedly shift offshore to jurisdictions like Singapore