Wyoming Ready To Host World’s First Crypto Banks
Regulations in Wyoming have been adjusted to help digital currencies and investors to flourish
The world’s first cryptocurrency bank is going to be based in Wyoming, USA. The state is currently accepting charter applications for banks that plan on serving customers through digital asset management.
An article released by the Wyoming Business Report revealed that the state has been open for applications since last November. One of the corporations that are looking to apply is the Avanti Financial Group, which is based in Cheyenne.
Wyoming legislature has approved several measures with the goal of preparing the state’s regulatory environment for the presence and management of digital currencies such as Ethereum, Bitcoin, Litecoin, Ripple, and the rest. The bank is expected to operate using blockchain technology.
Atty. Matthew Kaufman, from Cheyenne-based law firm, Hathaway and Kunz LLP, revealed that the Cowboy State’s efforts to integrate cryptocurrencies with mainstream financial operations were spearheaded by the then-Governor Matt Mead’s Economically Needed Diversity Options for Wyoming (ENDOW) Initiative. Kaufman was recruited to serve on the Blockchain Coalition with the goal to help establish the state’s footing in other business sectors beyond fossil fuels.
“Wall Street has strict regulatory guidelines on its use, trading, and growth. On the other hand, Wyoming is more nimble and can move quickly to respond to the needs of the industry.” Kaufman explained.
While the global market has eased up on its position towards digital currencies, an official bank that is responsible for the management of these currencies is yet to be seen.
One significant challenge to the growth of digital currencies is the lack of access to banking institutions. Due to the high risk and volatility associated with investing in cryptocurrencies, banks do not entertain requests for crypto-investors or exchanges to open bank accounts.
This has resulted in a worldwide lack of access to basic services for digital currency investors and businesses. They are unable to run payroll, apply for loans, conduct transfers, or have formal accounts for simple money services. This drives businesses to shady third-party financial providers.
Wyoming has now become the first state to create a legal framework for a banking charter that gives digital currencies access to a banking system. This process was started in 2019 when the Legislature enacted a bill establishing the Special Purpose Depository Institutions (SPDIs). This authorized chartering institutions to “receive deposits and conduct other incidental activities, including fiduciary asset management, custody, and related activities focusing heavily on virtual currencies, digital securities, and utility tokens.”