Earlier this month, Wyoming passed a law giving legal protections to decentralized autonomous organizations, or DAOs, that’s just the beginning of the state’s push to be a friendly home for the digital asset industry.

That’s according to the state’s Republican Senator Cynthia Lummis, who spoke at Coinbase’s Update The System summit in Washington D.C. earlier this week. 

“Never assume Wyoming is a fully baked cake on this subject,” Lummis said. “We're always in the kitchen. We're always creating new recipes for an industry that itself is innovating, and in the kitchen, coming up with new recipes for how to use these marvelous new technologies.” 

The Decentralized Unincorporated Nonprofit Association Act (DUNA) creates a non-profit corporate form for a DAO to allow non-profit DAOs to engage in profit-making activities, and goes into effect on July 1, 2024. 

“Wyoming continues to innovate,” Lummis said. “They have a caucus that meets year-round and we’re going to continue to innovate in this space and provide opportunities for the digital asset community in Wyoming.”

The state was one of the early movers to legally recognizing DAOs. The new law will provide DAOs with a more certain legal existence, help them to pay taxes and provide individual members with limited liability protections from the actions of other members. 

Ji Kim, general counsel & head of global policy at the Crypto Council for Innovation (CCI), says this is one of the most advanced efforts yet to adapt corporate law to technological and governance attributes of DAOs. 

“Wyoming lawmakers have built upon past efforts to create what should be a good fit for many web3 projects,” Kim said. “Simply put, DUNA creates legal certainty around the status of a DAO, and can help ensure compliance, sound governance and further development of DAOs.” 

The new changes will take time to implement, he said. “We appreciate the forward-leaning approach here that seeks to advance new economic models that decrease centralization, gatekeepers, and rent seeking.” 

At the summit, Lummis said it made sense to her that digital currencies are a store of value without being in the ground, such as with an oil, gas or coal reserve. Lummis touched on the validity of using the Howie Test for determining what is or isn’t a security, the importance of state involvement and how the states can create digital asset laws using the existing financial frameworks as their base. 

While Lummis doesn’t think 2024 is the year we’ll see an epiphany within the banking system with regard to cryptocurrency, she does believe Bitcoin is coming into mainstream acceptance – thanks to Bitcoin exchange-traded funds (ETF). She’s most optimistic on stablecoins for the 2024 calendar year, with the bipartisan motivation to move forward with stablecoin legislation. 

“It’s not based on whether you’re Democrat or Republican. It’s whether you’re government-centric or private-centric,” Lummis said. “The sovereign individual is who our constitution is trying to protect. When all else fails, read the directions. The U.S. Constitution is our direction. It was created so people have freedom and sovereignty, and could use their intellect and foresight to make this the greatest country on earth.”