Even though there is conflict about the classification and regulation of cryptos in different countries around the world, and even other states in the U.S., the state of Wyoming is doing its part in managing and taking advantage of the developing scene of tokenized and digital assets.
Forbes reported on January 18 that in a noteworthy initiative of the United States for the legalization and promotion of blockchain companies and cryptocurrencies, a bill has finally been introduced that intends to clearly define the legal standing of digital assets, including offer digital asset custody over banks instead of financial institutions.
According to the article, there are three classifications of digital assets presented in the bill which are digital securities, digital assets, and most important of all, virtual currencies which grant cryptocurrencies the same treatment as money within the state.
Just recently, the state of Wyoming in USA has passed the bill which defines the acknowledgement of digital assets, such as cryptocurrencies, as money, based on the state legislature website.
The bill passed its first reading on January 29, the second reading on January 30 and the third on January 31 of this year. Finally, it was introduced to the state’s House of Representatives on February 1.
Digital Assets Classified as Property
Wyoming Tribune Eagle described in its report that the bill categorizes “digital assets, including cryptocurrency, as legal property … It would subject cryptocurrency to some of the same rules as money by expanding existing laws,” Furthermore, the publication specified that the “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.”
“It adds value and legitimacy to the currency by giving financial institutions and businesses the ability to use it more flexibly in ways they are already familiar with,” (Sen. Tara Nethercott)
Digital assets are classified under Wyoming’s existing laws as “property within the Uniform Commercial Code (UCC).” Moreover, the bill defines 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.” While virtual currency is classified as a digital asset that is “Used as a medium of exchange, unit of account or store of value; and … Not recognized as legal tender by the United States government.”
The bill refers to Wyoming laws’ article 9 of the UCC (title 34.1) which lists rules on “secured transactions.”, the bill claims that for the purpose of this article 9, “Digital consumer assets are intangible personal property and shall be considered general intangibles,”. Likewise, for the purpose of article 8 and 9 of the same code, “Digital securities are intangible personal property and shall be considered securities.” Lastly, according to the bill:
An article from the Bitcoin.com mentioned that the bill also permits “security interests in digital assets,” certifies “an opt-in framework for banks to provide custodial services for digital asset property as directed custodians,” and specifies “standards and procedures for custodial services under this act.” Also, the bill states that “The courts of Wyoming shall have jurisdiction to hear claims in both law and equity relating to digital assets.”
The text of the bill states that “A bank may provide custodial services for digital assets consistent with this section upon providing sixty (60) days written a notice to the commissioner.”
The Wyoming Tribune Eagle detailed that the bill would “allow banks to hold digital assets in trusts with ease … While customers could not deposit bitcoin in the bank itself, they could keep it in their personal trust as property.”
For the Betterment of Wyoming
The initiative of Wyoming to introduce this Bill, and as a result turn into an appealing choice for crypto users and businesses are not only development for the new fintech but also the state itself, as stated by an article on Forbes.
Wyoming is taking advantage of the emerging industry of digital asset custody to establish in the state similar with industrial loan companies and credit cards companies when their laws were passed in the 1970s and 1980s in Utah and South Dakota.
As the first US state to recognize crypto as money, the bill is marked as the start of forming a regulatory home the digital asset custody industry in Wyoming, and it is already beginning to notice a level of utilization. A report from Bitcoinist.com said that Cardano, a blockchain platform, has already advanced to Wyoming after the incoming 33rd Governor of Wyoming, Mark Gordon, expressed approval of Blockchain’s capability.
Wyoming Blockchain Coalition’s co-founder explains why Wyoming is a good place for blockchain and crypto to get a legislative advantage in the US:
“Wyoming spotted an opportunity to lead in this field last year, and realized it had just as many advantages in competing for this nascent industry as any other place – and more so,” Long explained. “Blockchain is software, so it’s global. A line of code doesn’t care who wrote it or where it was written. As Joe Lubin said when he spoke at WyoHackathon last fall, there’s no reason why the next Google can’t be here in Wyoming.”
This will not only benefit the states, considering it would be put into practice successfully but also the legitimation and global state of blockchain and crypto.