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Wyoming is leading the race to enact crypto friendly legislation to stir crypto activity in the US state.
Before 2019, the western state has been conservative with its approach towards money-transmission. However, a new generation of lawmakers are turning the tide and transforming the financial thread of the state to allow for more space for digital currency to breathe in a state which has been knocking down crypto consistently until this year.
A few years ago, the residents of Wyoming were not even allowed to own digital wallets. However, this was overturned in a bill introduced on February 14 this year. The Digital Assets-Existing Law bill states that Wyoming “law recognizes property rights in the digital ownership of digital assets.” In other words, it recognized the rights of the residents to own digital currency.
The stream of legislation did not break following the Digital Assets-Existing Law bill. More crypto friendly bills were made part of state legislation. The corporate sector was authorized to issue certificate tokens in lieu of stock certificates after tokenization was unanimously accepted. Later, Special Purpose Depository Institutions (SPDIs) were commissioned to enable a new type of fully-reserved fiat bank that was authorized to store crypto assets.
Bypassing New York’s Crypto BitLicense
These industry compliant SPDIs were seen by many crypto businesses as a way of bypassing New York’s notoriously hard-to-get BitLicense. “We are fairly confident that the Wyoming SPDI will be able to operate in New York without a BitLicense,” Chris Land, general counsel of the Wyoming Division of Banking, told reporters.
Caitlin Long, Governor to Wyoming Blockchain Task Force, assures that with the introduction of SPDIs, crypto companies have the option of either partnering with unaffiliated SPDIs, or creating their own affiliated SPDI. The point is, the overall architecture is now in place to support many of these companies who will not need to look up to traditional banks that have been willing to bank the industry.
If the proposed SPDIs work, this could be revolutionizing for the crypto industry that has to seek licensing from hostile watchdogs. Wyoming is transforming itself into an epicenter of blockchain laws in the US.
In a country where institutional investors are not allowed by the federal law to own the assets they manage, Wyoming has stepped forward to propose its SPDI which are guaranteed to provide digital asset custody. If the current trend in legislation continues, soon, cryptocurrency will run parallel to fiat, at least in Wyoming.