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The Digital Agency of Japan is exploring how DAOs can run and what they can achieve. Japan has been looking at ways to integrate Web3 technology into their government operations as well as the economy.
Japan’s Digital Ministry has just announced that they would be creating a decentralized autonomous organization (DAO) to explore Web3 technology. The announcement took place during a meeting on Wednesday, November 2.
Japan’s DAO for Web3 Exploration
The Digital Agency of Japan said that they have established the DAO to understand the “functions and roles” of such decentralized organizations. The DAO will provide a greater understanding of how such organizations can run and what they can achieve. Besides, it will also help in identifying their limitations.
The group also added that they would consider the benefits and challenges of granting legal status to DAOs in Japan. The Digital Agency of Japan cited a similar development that took place last year in the US state of Wyoming.
A DAO is basically a blockchain-based organization governed by the holders of the native crypto token. These holders vote on matters related to running the decentralized organization. DAOs provide an innovative approach to business management. Some industry experts also refer them to be offering a ground-breaking use case for blockchain technology.
Japan has been looking at ways to integrate Web3 technology into their government operations as well as the economy. Under the Ministry of Economy, Trade and Industry (METI), Japanese Prime Minister Fumio Kishida established a Web3 policy office that will focus on creating policies to enable blockchain expansion.
Future Plans with DAOs
The Digital Agency of Japan said that they would investigate aspects of DAO that could potentially be used for “cross-border crimes that exploit blockchain technology” and compromise user protection. The announcement also noted that the agency would be conducting a blockchain analysis of complaints liked to the crypto space from Japan’s authorities. The agency said:
“In regards to services and tools discussed in connection with Web 3.0 including crypto assets, DeFi, NFTs, DAOs, and the metaverse, each have benefits and risks. There are various problems to be addressed.”
Additionally, the agency has been exploring more initiatives related to digital innovation. This includes conducting a trial run for non-fungible tokens, or NFT, “that proves the work history of staff members”. However, the agency added that such a token would be falling outside Japan’s Anti-Money Laundering and Countering the Financing of Terrorism regulations.
Japan is one of those countries reported to have the strictest regulations for digital assets. But it is also the country that has been quite ahead in crypto adoption. Earlier this month, the Japanese Prime Minister said that they are making efforts to invest in the country’s digital transformation.
Additionally, Japan is also working actively on its central bank digital currency (CBDC). Japan’s Credit Bureau (JCB) has already started testing its CBDC for payment settlements.