In the rapidly evolving landscape of artificial intelligence (AI), ethical governance frameworks are critical as AI systems become integral to sectors like finance and public governance. Generative AI systems, while transformative, pose significant ethical challenges, including bias, misinformation, lack of transparency, and misuse of intellectual property. Current centralized governance methods are opaque, unscalable, and raise questions about accountability and trust. This paper proposes a decentralized blockchain-based framework for ethical and responsible AI governance. Using blockchain features, such as immutable audit logs, data provenance tracking, bias auditing tools, content moderation platforms, and decentralized governance structures, the framework addresses key challenges in AI oversight. Smart contracts enforce ethical policies in real time, while token-driven incentives and staking mechanisms inspired by decentralized finance (DeFi) encourage honest participation. Decentralized Autonomous Organizations (DAOs) democratize AI governance, enabling multi-stakeholder decision-making. Key use cases include bias detection, content moderation, data provenance, audit logging, regulatory compliance, and decentralized governance. Challenges such as scalability, integration complexity, and the need for balanced human oversight are analyzed, with potential solutions like permissioned ledgers and cryptographic privacy techniques. This research charts a path toward morally aligned AI by combining blockchain’s trust infrastructure with AI’s transformative power, offering a blueprint for academia and industry to implement responsible AI monitoring. A decentralized and transparent approach can enhance trust in generative AI while respecting societal values.