The Cagayan Economic Zone Authority (CEZA), the government agency in charge of the Cagayan Special Economic Zone and Freeport (CSEZFP) in Sta. Ana, Cagayan, has announced it is forming a registry for decentralized autonomous organizations (DAO) as part of its bid to become the blockchain capital of Asia and possibly the world.
A DAO is an autonomous community-led entity with no central authority that operates businesses or initiatives through a blockchain, digital asset, or the Web3 industry.
Prior to the advent of DAO registries in other parts of the world, DAOs existed in a legal gray area. By joining a DAO registry, these organizations become formally incorporated, gaining legal protection, operational benefits, and other advantages through doing so.
In launching a DAO registry, CEZA said it wants to become the best place in the world for this business activity, besting all the cities and countries in the space.
Other DAO registries include Malta, Switzerland, Estonia, Gibraltar, and Wyoming, United States, which is currently the number one destination for DAOs seeking registration.
In aiming to become the world’s number one DAO registry, CEZA said it is not only after an influx of DAO registrations but to make DAO registrations an entrypoint for companies into building a full-fledged blockchain ecosystem.
“This process can occur organically — organizations, after all, will want to do business in the locality that their DAO is registered in. This involvement can also be facilitated, as CEZA will strive to do in its zone. DAOs registered in CEZA will receive many of the same benefits of other businesses located there, such as tax and other fiscal incentives,” the agency said.
The opening of a DAO registry in the eco-zone would thus lead to rapid growth in blockchain businesses that operate out of CEZA.
“While a DAO registry is an achievement on its own, having and maintaining one is also strategically important. Persuading any enterprise to do business in your jurisdiction is difficult. But making this case when the business is already incorporated there is not only easier, but a natural progression of events,” said CEZA administrator Jamie R. Escaño.
Achieving the goal hinges on CEZA being a more attractive destination for registration than other markets with DAO registries. This challenge, it noted, is easier said than done.
“As pioneers in blockchain legislation, these markets did their best to enact progressive policies and frameworks that can potentially stand the test of time,” it said.
But there are still severe gaps in these frameworks, all of which CEZA said aims to address. For example, in some jurisdictions the fees associated with filing a DAO are cost-prohibitive.
In other cases, the time horizon of obtaining a DAO registration is excessive and possibly detrimental to a business in an industry where speed is important, it added.
In other markets, the issue is neither cost, nor speed. Some jurisdictions still hold too much liability on the senior officers of a DAO, or are bestowed with extraordinary ability that make businesses uncomfortable, such as the ability to completely dissolve a DAO in the event of perceived wrongdoing.
From this perspective, CEZA actually benefits from being a relatively late entrant into the DAO registry space: The zone can address all of the issues that have made businesses reluctant to register or operate there. It would not make sense to fix these issues using any technology other than blockchain.
To this end, all registrations of DAOs will be done on a public ledger powered by a blockchain, which will enable enterprises to track and monitor the status of any application, fund any application or renewal entirely through the DAO registry system, and get their needed documents in a timely manner, since thousands of miners help validate transactions.
In making these changes, CEZA can become the preferred registry of choice for DAOs, the agency pointed out.
“By launching this DAO registry, CEZA will attract more blockchain businesses. In time, this critical mass of enterprises will be the selling point for more of its peers. Eventually, businesses will come primarily for the zone’s branding as the Crypto Valley of the World: They know that they’ll meet other innovators in the space right here,” said Escaño.
