The U.S. state of Wyoming is taking the lead in matters of cryptocurrency and blockchain with the introduction of a bill that explains the legal standing of digital assets and proposes custody of digital assets through banks rather than financial institutions.
The bill, introduced on January 18th, categorizes digital assets in three ways.
The first classification “digital assets” is defined as,
a representation of economic, proprietary or access rights that is stored in a computer readable format
The second, “digital securities,” which the bill clarifies as,
a digital asset which constitutes a contract, transaction or arrangement where a person invests money in a common enterprise and is led to expect profits from the efforts of a promoter or a third party, and does not include any other asset within the meaning of security under
Although these classifications aren’t new, their application to cryptocurrency takes it out of the confusing regulatory state it is usually in and thrusts it forward in a positive way. The third classification is “virtual currencies” which is most significant as the bill makes clear that cryptocurrencies are to be treated as currency within the state.
a digital asset that is: (A) Used as a medium of exchange, unit of account or store of value; and (B) Not recognized as legal tender by the United States government.
The bill would permit Wyoming to authorize banks to act as digital asset custodians, which would in turn meet the SEC requirements for qualified custodians of digital assets. Forbes reported that the change in custody for cryptocurrency is particularly remarkable as it would be done through banks even though the bank would not be taking actual deposits of digital assets. Rather these would be assets under administration.
The bill was sponsored by Senator Tara Nethercott, Co-Sponsored by Senator Ogden Driskill, and House Representative Tyler Lindholm amongst others. This move by Wyoming makes the state the most attractive option for blockchain and cryptocurrency businesses. BLOCKTV’s Yael Lavie spoke with Tyler Lindholm earlier this month, to find out more on Wyoming’s blockchain legislature.