US State Recognizes Blockchain-Based Nonprofit Entities

The adoption of decentralized autonomous organizations (DAOs) has gained momentum in the United States with Alabama's recent approval of a law that recognizes blockchain-based nonprofit entities. The new legislation, which will take effect on October 1, 2026, provides a framework for decentralized unincorporated nonprofit associations (DUNAs), including liability protections.

The law, authored by Senator Lance Bell, defines DUNAs as organizations with at least 100 members joined by mutual agreement. These entities can own property and engage in revenue-generating activities, but profits cannot be distributed to members, preserving their nonprofit status.

Alabama's decision follows Wyoming's lead in recognizing DAO-like entities. Industry participants view this trend as part of a broader shift in US policy towards clearer regulations for decentralized organizations.