When Wyoming announced new cryptocurrency bills last week to set out a clear and concise definition of their cryptocurrency regulations, it was met with joy not just from crypto-related businesses in the state but across the entire crypto-sphere.
Although many have seen the possible implementation of the bill as ‘revolutionary’ and a step in the right direction for the US cryptocurrency markets, what will it actually mean for crypto-related business? And will it have a knock-on effect across the nation?
According to Forbes, the bill will specifically deal with three cryptocurrency areas. The bill clarifies the position of digital assets, digital securities and the issue of virtual currencies and how they will receive the same treatment as cash in Wyoming.
The bill aims to separate blockchain businesses in Wyoming into the three categories that will give each area a clearer definition.
The definition of a digital asset in the bill is “a representation of economic, proprietary or access rights that are stored in a computer-readable format, and includes digital consumer assets, digital securities, and virtual currency.”
Wyoming’s definition of a “Digital consumer asset” is cryptocurrency that has been purchased mainly for consumption or for “personal or household purposes.” This also covers any open blockchain token that will be deemed as personal property.
The bill also defines “digital securities”, which basically breaks down as any digital asset which “constitutes a contract, transaction or arrangement where a person invests money in a common enterprise and is led to expect profits from the efforts of a promoter or a third party.”
The bill also went onto to define the term “virtual currency”, deeming it to translate as “a medium of exchange, unit of account or store of value,” and something that is not recognized by the US government as legal tender.
The most ground-breaking aspect of the bill and one of the main reasons it’s excited so many crypto businesses and industry insiders is because it will legitimize Bitcoin. The bill will give cryptocurrencies the same status as money and will recognize peer-to-peer transactions. By giving legal status to bitcoin and other tokens, crypto related firms will also have greater legitimacy.
Digital assets will also be able to be authorized by banks who can then act as a supervisor or custodian of the cryptocurrency. This will fulfill the SEC’s requirements of needing a qualified custodian of crypto.
Because banks, which by their very being are nationwide, will be allowed to authorize crypto transactions instead of a state-run financial governing body or a trust company, the classification of the legal status of digital assets could become standard across the entirety of the US. At this moment, one of the many drawbacks and gray areas of cryptocurrency use across the US is the judging of a bankruptcy case and the current classification status of digital assets.
In effect, if the bill is passed, cryptocurrency related businesses could set up shop in Wyoming and legally operate across the 50 states of America. It would be something similar to what we have seen in Malta and Estonia, making Wyoming the new “crypto valley” in the US.
The news of the bill is a firm statement that Wyoming is not just clearing up the legal definitions of cryptocurrency for local blockchain businesses, but is also looking to attract other new crypto startups to flit to the state. Crypto users in Wyoming will fully understand the definitions of digital assets, while crypto-related companies would thrive.
The news is being met with very positive vibes across the Twittersphere as local crypto experts such as the co-founder of the Wyoming Blockchain Coalition Caitlin Long announced the bill:
Although the news sounds well and good, it is important to note that at this stage the bill has only been introduced, but not yet passed. However, reactions across Twitter have been praising Wyoming for the proposal and that leading the revolution will be a massive boon for the state and allow crypto businesses the peace of mind to legally operate across the entirety of the US cryptocurrency markets.
Last modified: March 4, 2021 2:30 PM