The U.S. State of Wyoming is quickly becoming the hotbed for crypto regulation in the country, with lawmakers now proposing 2 more bills for legislation, this time focused on legitimizing cryptocurrencies as an asset class. The bill, SF0125, recognizes “property rights in the direct ownership of digital assets.”
…classifying digital assets within existing laws; specifying that digital assets are property within the Uniform Commercial Code; authorizing security interests in digital assets; establishing an opt-in framework for banks to provide custodial services for digital asset property as custodians; specifying standards and procedures for custodial services under this act…, the bill reads.
Caitlin Long, member of the Wyoming Blockchain Coalition, publicized the news on Twitter:
1/ BOOM! #Wyoming just recognized clear, direct property rights for #digitalassets by passing SF125! This means #blockchain cos will prob want to apply WY law to your contracts, domicile here, &/or have a physical presence here. Thx again to the army of ppl who helped over months pic.twitter.com/I4E3GfPZbC
— Caitlin Long 🔑 (@CaitlinLong_) February 14, 2019
It makes perfect sense that Wyoming is the epicenter of blockchain law in the US. That’s also why institutional investors, which are prohibited by federal law from directly owning the assets they manage, can rest assured that Wyoming’s digital asset custodians are actually solvent, Long said.
Wyoming has been in the thick of things when it comes to blockchain-related regulation, with the state passing several laws in crypto since the new year began.
This new development joins the ratification of 2 laws passed only a few weeks ago. One law officially deemed cryptocurrencies as money. Shortly after, state authorities went a little further and recognized crypto as property.
While the U.S. is lagging behind other nations in terms of overall regulation, some states are taking up the mantle, keen to leverage the powers of blockchain. New Hampshire has proposed that Bitcoin be considered for state tax payments, while Colorado senators have introduced a “Digital Token Act” to exempt digital assets from securities laws.
Who Will Benefit From These Laws?
The 2 new bills will be passed on to Wyoming Governor Mark Gordon, and could become official by as early as next week.
The key point about this bill is the fact that it addresses property law, which states are allowed to determine.
The target audience of this new bill will primarily be individual and institutional investors. Now that digital assets are deemed as property, these entities can directly hold digital assets and not indirectly through an intermediary.
Long is optimistic that this change in legality could attract heavy institutional investment and blockchain companies to Wyoming.
All of these regulations that Wyoming is forming sets an example for other states to follow. Banks can operate with cryptocurrency more easily, while investors have less to be worried about when it comes to the legitimacy of cryptocurrency.
In the Twitter thread that followed the announcement, Long explains how the bill makes digital asset ownership easier and more direct:
In other words, you’re not forced to own digital securities through an intermediary. Blockchain tech enables direct ownership of assets, and now the law does too.” Since property law in the United States is in the hands of state jurisdiction, this new step is not only safe from the federal government but also can serve as a model for other states.
Indeed, the combination of making crypto legal tender and allowing banks to provide financial services with blockchain-based assets encourages innovation and work in the states. According to one of the bills:
The rapid innovation of blockchain technology, including the growing use of virtual currency and digital assets, has resulted in many blockchain innovators being unable to access secure and reliable banking services, hampering development of blockchain services and products in the marketplace.