Wyoming lawmakers have passed three bills aimed at making the state a prime destination for blockchain and crypto businesses.
The bill SF0125, which deems digital assets as property and enables banks to serve as crypto custodians, has been approved by Wyoming House of Representatives last week. The draft law passed a House vote 54-2 and has been concurred in the Senate the following day, having 29 votes for and zero against.
The bill refers to the digital asset as “a representation of economic, proprietary or access rights that is stored in a computer readable format, and includes digital consumer assets, digital securities and virtual currency.”
If approved and signed by Wyoming Governor Mark Gordon, the bill will become law effective July 1 and would recognize digital assets as property under the Uniform Commercial Code.
“Digital consumer assets are intangible personal property and shall be considered general intangibles, as defined in W.S. 34.1‑9‑102(a)(xlii), only for the purposes of article 9 of the Uniform Commercial Code, title 34.1, Wyoming statutes,” the bill states.
It also has a provision for permitting banks to offer digital asset custodial services providing they are compliant with every internal control, accounting, and other standards. A bipartisan group of Wyoming legislators first presented the bill in January.
Wyoming Blockchain Coalition co-founder Caitlin Long said the bill is a significant step forward for the state and may indicate a boon for cryptocurrency users and startups alike.
In addition, the Wyoming House of Representatives passed two other crypto bills on Friday—HB0185 and HB0074.
Introduced last month, HB0185 allows securities to be released in tokenized form. “Normally, a stock certificate is a piece of paper. … If you want to use a blockchain token to represent a stock certificate, [that would be] legal in Wyoming. [It would be] a legally issued security,” Long stated.
HB0074 intends to solve a major challenge to the blockchain sector in Long’s perspective—that “banks have not been banking the [crypto] startups.”
“There was a crackdown in the fall of 2017 and a number of banks went through and did a big compliance review that closed every account that was connected to digital assets at all. A lot of businesses when out of business because they lost their bank accounts,” Long noted. “This [bill] is designed to be an industry utility. It’s designed to serve a very important need that wasn’t been served by the mainstream banking industry.”
Based on Long’s official website, HB 0074 provides “special purpose depository institutions to serve businesses which may not be able to access traditional banking services, including blockchain businesses.”
“[With HB0074,] it’s not required to have FDIC insurance in place, so that means they’re not obligated to listen to [certain] federal government [requirements] … Blockchain-type industries, gun industries, all sorts of industries down the line get discriminated against. So, that’s what we’re targeting here,” Wyoming House of Representatives Republican member Tyler Lindholm remarked.
Lindholm added that passing the three bills “surpasses anything we did last year. I think you’re going to see institutional customers such as Fidelity looking at this.”
“There’s going to be an influx of a financial services industry to the state of Wyoming, both from the special purpose depository institutions that we talked about today–these are the non-FDIC insured banks–as well as separately there’s going to be digital asset custodians coming into the state of Wyoming,” Long said.
The bills are now awaiting the state governor’s signature. “Obviously it’s not done until it’s done so we’re careful to say they’re not law yet but they are heading there most likely,” Long noted.
Last month, Wyoming approved a FinTech sandbox bill, seeking to allow startups, including those in the blockchain industry, to trial new technologies and see how they would function in current regulatory regimes.
“I think right now Wyoming is the standard. We’ve got other states running in one form or another our legislation… so they’re trying to play catch-up. The unfortunate part of that is we passed the bills this year too, so that puts us out a little bit farther out front,” Lindholm highlighted.