The Digital Ministry of Japan has set up a decentralized autonomous organization (DAO) to evaluate the potential of decentralized governance.
The ministry announced on Nov. 2 the launch of a Web3 Research Group DAO to assess the benefits and risks of decentralized governance.
A DAO is an organization entity devoid of centralized leadership and hierarchy, managed collectively by members participants of a blockchain network. DAOs are the main way in which It forms an important component of how protocols are governedmanaged today, with decisions on potential upgrades and structures being determined by often sometimes anonymous participants, who stake their tokens for voting rights
Japan’s Digital Ministry plans to examine how DAOs work from the perspective of its participants. In doing so, the group will ascertain whether DAOs should be granted legal status in the country.
The Digital Ministry said it will look into concepts around financing through DAOs through token issuance, NFT issuance and examine the potential use of these entities in cross-border crimes.
The direction of this study will ultimately be to “draw a future image of Web 3” and what Japan should aim for, the group said
Japan was known to have one of the tightest regulatory policies around digital assets. However, the nation has recently moved to relax some of these rules, particularly around token listing.
On Oct. 18, Bloomberg reported that the Japan Virtual and Crypto Assets Exchange Association (JVCEA) intends to do away with pre-screenings for coins and tokens issued through an initial coin offering (ICO).
“We hope the latest measure will help revitalize Japan’s crypto assets market,” said JVCEA Vice Chairman Genki Oda in a statement to Bloomberg.