Alabama Governor Kay Ivey gave final approval to a bill that legally recognizes decentralized autonomous organization-like structures in the state.

According to Alabama's official website for the Secretary of State, SB 277 — Decentralized Unincorporated Nonprofit Association Law — was signed into law on Wednesday. 

The bill, authored by Republican Senator Lance Bell, establishes a legal framework for decentralized nonprofit organizations, allowing such entities to use blockchain technology and smart contracts for operation and governance. 

According to the bill text, a decentralized unincorporated nonprofit association (DUNA) comprises at least 100 members who joined by mutual agreement. While it can own property and engage in profit-making activities, it must not distribute such profits to members.

Moreover, the bill stipulates that members of a DUNA generally have no personal liability for the association's activities. The law is expected to go into full effect on Oct. 1, 2026.

More to come

By signing the bill into law, Alabama became the second U.S. state to give DAO-like entities a legal standing, following Wyoming's legislation in 2024.

"Alabama is the second state after Wyoming to provide legal status and limited liability protections to DAOs, giving decentralized communities the certainty to build, govern, contract, and scale in the real world," said Miles Jennings, Head of Policy at a16z Crypto. "This is forward-looking policymaking at its best."

Jennings pointed out that several other U.S. states are making efforts to establish similar regulatory frameworks for DAOs. West Virginia's House Bill on DUNA is also awaiting the final sign-off.