Wyoming is poised to become the first US state to pass legislation regarding banking permissions for cryptocurrencies and digital assets.
The Bill, SF0125, which was introduced by a bipartisan group of state legislators on Friday, would classify digital assets as property and create “an opt-in framework for banks to provide custodial services for digital asset property as directed custodians.” If passed, the SF0125 would set the standards for such services, clarify how state courts might classify digital assets and more.
Caitlin Long, co-founder of the Wyoming Blockchain Coalition, said the bill is a big step forward for the state, one with the potential to create a boon for crypto startups and investors.
According to Long, “A lot of companies are setting up as New York trust companies… the [Wyoming proposal] is a much better license than a New York Trust license because it’s [aimed at banks] and it’s in a state that has clarified the legal status of digital assets. Those two things are equally important… there isn’t another state that’s providing that clarity.”
Support for the bill has been notable. It is being backed by members of both the Democratic and Republican parties, and leadership of both Wyoming’s House and Senate are co-sponsoring the bill.
Senate sponsors includes President of the Senate, Drew Perkins (R.), Vice President of the Senate, Ogden Driskill (R.), and Senate Minority Leader, Chris Rothfuss (D.). House representatives supporting the bill include Speaker of the House, Steve Harshman (R.), and House Majority Whip, Tyler Lindholm (R.), as well as a handful of other representatives and senators.
Though SF0125 proves to be popular, the bill is still in its infancy.
“This [bill] was just released, it still has to go through everything,” said Long. “Anything can happen in a legislative process. It’s not done till the governor signs the bill, but it has a lot of momentum behind it and a lot of support.”
Long further commented on the crypto community, saying, “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.”
Alternatives to the bill have also been proposed, including rules that would classify cryptocurrencies similarly to securities and would have force owners to store their assets via intermediaries.
“We would have lost direct property rights of [those assets],” said Long. “There was momentum building behind that proposal … and Wyoming went in a different direction that’s much better for cryptocurrencies.”