Legislators in Wyoming Set to Legalize Crypto Custody at Banks

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by Darya Rudz · 4 min read
Legislators in Wyoming Set to Legalize Crypto Custody at Banks
Photo: Thomas Hawk / Flickr

With the new legislation, Wyoming may become the first state in the U.S. where banks are allowed to provide custodial services for digital assets.

A huge step in the adoption of blockchain and cryptocurrencies has been recently made by legislators in the U.S state of Wyoming. Lawmakers have introduced two bills that demonstrate innovative approach the technology. One bill relates to the tokenization of stocks, and another one concerns cryptocurrency classification.

Earlier, the state’s authorities passed bills related to cryptocurrency regulation. The new legislation, introduced on Friday, will provide legal status for digital coins and recognize peer-to-peer transactions of cryptocurrencies. Sponsors of the bill are both Wyoming’s House and Senate.

Among the representatives are senators Drew Perkins, president of the Senate, Vice President of the Senate Ogden Driskill and Senate minority leader Chris Rothfuss. Also on board are representatives Steve Harshman, Speaker of the House, and House Majority Whip Tyler Lindholm, alongside a handful of other representatives and senators.

The first House Bill 0185 was introduced by representative Jared Olsen and concerns “Corporate stock-certificate tokens.” According to the legislation, “the articles of incorporation or bylaws of a corporation may specify that all or a portion of the shares of the corporation may be represented by share certificates in the form of certificate tokens.” The proposed bill would allow companies to digitize and store stock certificates on a “blockchain or other secure, auditable database.” The legislation would come into force on July 1st.

Another SF0125  bill suggests classifying cryptocurrency assets into three different categories. If passed, the bill would classify digital assets as property within existing laws. As it was reported, it separates cryptocurrency assets into digital consumer assets that are “intangible personal property”, digital securities, and virtual currencies.

Custodial Services For Digital Assets

Moreover, according to the bill, banks will receive the green light for supervising digital assets and taking them under custody. The new legislation would establish “an opt-in framework for banks to provide custodial services for digital asset property as directed custodians,” determine standards for such services.

The bill reads:

“A bank may provide custodial services for digital assets consistent with this section upon providing sixty (60) days written notice to the commissioner.”

Wyoming: Another Haven For Crypto Businesses

The new legislation would make Wyoming the state of choice for blockchain and crypto-related businesses. Reinforcing the recognition of digital assets by authorizing banks to supervise them and taking them under custody, the bill lays the ground for future regulation.

Senator Nethercott said:

“Wyoming is an innovative and forward-looking State that is open for business. We are excited for what the future holds and want to continue taking the lead with shaping the future of business. The time is now to provide the pathway for blockchain and cryptocurrencies, and Wyoming has the nimbleness and responsiveness to the needs of these industries to respond accordingly to the growing and adapting landscapes of cryptocurrency.»

Speaking of the proposal, Caitlin Long, the co-founder of the Wyoming Blockchain Coalition, said:

“It truly gives the blockchain industry something I think it needs, which is legal clarity to bring it to the next level, and even the bitcoin purists who would be opposed to intermediate [entities] being in [charge] would take comfort in knowing they now have legal status for their assets.”

Senator Ogden Driskill commented:

“The legislation, all taken together make Wyoming the Silicon Valley of Blockchain and Cryptocurrency of the nation and arguably—the world.”

The features of new legislation have already drawn the interest of many crypto investors. And Wyoming has all the chances to become new heaven for crypto-related businesses.

Other Attempts of Crypto Regulation

Such legislation is not the first attempt to classify digital assets. In December 2018, U.S. congressmen Warren Davidson and Darren Soto introduced a bill that would exclude digital currencies from securities classification and substantially improve the tax treatment for cryptocurrencies.

At the beginning of 2019, New York created the ‘pioneer’ US cryptocurrency task force in order to determine the perfect balance to regulate cryptocurrencies expected to take over the global financial space.

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