Wyoming Legislators Looking To Establish Blockchain-Friendly Bank To Lure Bitcoin Startups

Legislators in the state of Wyoming are currently drafting legislation to oversee the creation of a blockchain friendly bank. This financial institution will provide banking access to the FinTech companies in the state and to help lure Bitcoin startups to the region.

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Legislators in the state of Wyoming are currently drafting legislation to oversee the creation of a blockchain friendly bank. This financial institution will provide banking access to the FinTech companies in the state and to help lure Bitcoin startups to the region.

Blockchain task force formed

The state has put in place a blockchain taskforce who are currently drafting legislation for the creation of a new blockchain bank. The 10 member task force is made up of state senators, representatives, and influential Wall Street veterans.

The blockchain bank will be created to make it easier for blockchain companies in the state to carry out their financial activities.

These “special purpose depository institutions” (SPDIs) are being developed to provide FinTech companies in the state with secure and reliable banking services.

This latest development would be huge for the blockchain sector due to a lack of regulation at the federal level.

The co-chair of the committee and state legislator, Tyler Lindholm, stated that the financial institution is essentially a money warehouse.

The task force has been focused on finding ways to support local businesses without spending much money, with friendly regulation something that could help with that, he added.

He further stated that they are creating a law that the Blockchain and FinTech industry is looking for. So far, the blockchain sector has been disappointed by lack of regulation from SEC, FDIC and others.

However, Wyoming is doing it and it will show the cryptocurrency industry that the state is open for business, he added.

According to Lindholm, banks discriminate against crypto-related businesses, stating that:

If a bank somehow realizes they’re dealing with crypto or blockchain currency in any way, a person’s accounts can be shut down immediately. The way I see it, that’s banks being discriminatory toward certain businesses.

SPDI will work differently to traditional banks

The SPDI will function differently compared to the existing financial institutions in the state. It will be created to provide services to business customers and will be structured to function as a mutual company, with clients also having ownership.

The bank will have a very high liquid asset requirement for its clients, as handing out loans will not be a part of its function. SPDI will also have specialists in certain areas such as customer identification, anti-money laundering, and beneficial ownership requirements.

For normal banks, their fractional reserve requirement states that they need to have just 10% of their reserve available at any time. That would not be the case with SPDI which is expected to maintain 100% of liabilities as liquid assets.

The financial institution is designed to streamline compliance requirements by allowing tech platforms to utilize legal entity identifier standards, smart contracts, and cold storage methods to ensure the data of their customers is secure.

New and established businesses will be allowed to become members of the bank, with the minimum amount balance currently set at $5,000.

Wyoming has been making some notable progress in cryptocurrency regulation. In March, the state passed a bill which exempted utility tokens from securities laws.

A bill was also passed earlier this year which exempted crypto miners and blockchain startups from paying property tax in the state.

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