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The state of Wyoming has approved a blockchain law that allows banks to provide banking services to blockchain companies in the state. According to the legislative document, the new bill would create a new banking category called the Special Purpose Depository Bank, a group of state financial institutions that provide banking services to blockchain-based businesses.
The bill was approved unanimously by the state legislative committee 13-1, and seeks to remedy the banking problems faced by the blockchain enterprises in the state.
"The rapid innovation of blockchain technology, including the growing use of virtual currency and digital assets, has led many blockchain innovators to fail to access secure and reliable banking services, hindering the development of blockchain services and products on the market," the document states .
Traditional banks have not been friendly with blockchain companies in the "state of equality", depriving them of safe and reliable banking services for the sector because of the strict banking regulations that regulate the state.
"Authorizing special-purpose deposit banks to be hired in Wyoming will provide a necessary and valuable service to blockchain innovators, will emphasize Wyoming's partnership with technology and the financial industry, and securely develop the developing financial sector of this state ", reads the document.
Banks of this category are expected to maintain equal reserves with the value of deposits stored, which is higher than the fractional reserves held by traditional banks, for money laundering and fraud prevention.
"At all times, a special purpose deposit bank must keep liquid assets valued at no less than 100% of its deposit liabilities," the document states.
This clause has a price, though. That is to say, deposits held in deposit banks for special purposes will not be insured by the US Federal Deposit Insurance Corporation (FDIC).
The news was promptly shared on Twitter by Caitlin Long, co-founder of the Wyoming Blockchain Coalition, a group known to have supported the adoption of blockchain technology in the state. Long noted in the tweet that the bills were approved despite "heavy opposition" from the banks.
Known as one of the pro-blockchain states in the United States, Wyoming had made history at the beginning of March 2018 when it approved five blockchain-friendly bills. Among these, House Bill (HB) 19 exempts digital asset companies from the feared laws and regulations on money transmitters, and HB 70 which excludes cryptocurrencies from taxes in the state.
