Bear markets, bull markets. ETFs, delays. Yet the true litmus test of whether blockchain and cryptocurrency is being adopted can be found in local, fleeting news stories. The state of Wyoming – a mountainous region which is both 10th largest by area (as well as least populous) – has recently announced 13 new blockchain laws; making it the only US state to provide comprehensive legal frameworks for blockchain technology.
‘Senate File 125, sponsored by Sen. Tara Nethercott, R-Cheyenne, would establish property rights for owners of cryptocurrency and other ‘virtual assets’ under commercial law, clarifying the legal status of digital money. It also helps banks hold these assets in trusts.’
The Delaware of Digital Asset Law
As a result of Wyoming’s 13 blockchain-friendly laws, individuals and companies are granted the recognized support of the state in creating capital, revenue and jobs from blockchain products. Key aspects of these 13 state acts include:
- Recognition of direct property rights for individual owners of digital asset types (including digital securities, utility tokens, and all virtual currencies).
- The authorization of a new definition of a state-chartered depository institution, providing basic banking services to blockchain and other businesses.
- Creates the environment for a FinTech sandbox in providing key regulatory relief for financial innovators from existing laws for up to 3 years.
Importantly, Wyoming is the first state to offer clarity on the treatment of digital assets under existing commercial laws. As a result, the federal government cannot interfere with state-controlled commercial laws, and other states are able to enact Wyoming’s statutory language. Businesses registered in the state (and their customers) now have the ‘green light’ to access the protections and clarity surrounding existing financial transactions.
Over a dozen other US states are following Wyoming’s example in enacting their own digital asset bills. With enough time and exposure these actions could register interest in Washington DC, and may even begin paving the way for nationwide federal legislation. Whilst cryptocurrency companies may have to wait for their specific state to catch up, redomiciling to Wyoming will offer a major corporate and commercial advantage in the short-term.
The race for state-registered blockchain enterprises has begun!