The state of Wyoming has passed laws recognizing cryptocurrencies as money. What do these laws mean and what effect could they bring to the market?
March 07, 2019 | AtoZ Markets - The cryptocurrency market has been recovering since the turn of the year though there are possibilities that lower prices would happen before the next round of bullish phase. One of the major hurdles the cryptos world need to overcome is regulation and government adoption. In February, the Bank of Japan published a report to argue whether the Central Banks should replace bank-notes with digital currencies after carefully looking at the roles Central bank Digital Currencies (CBDCs) could play in the future of money. Meanwhile, there was a big development on 18th January when the legislature of the state of Wyoming presented a bill to recognize digital currencies as money. On 31st January, the bill was adopted and passed, making Wyoming the first state in the United States to fully embrace blockchain technology and cryptocurrencies.
Crypto categories covered in the bill
The bill included that crypto assets are in three categories namely: digital consumer assets, digital securities and virtual currencies. The state government enacted 13 laws to make cryptocurrencies and blockchain technology legally backed entities. The bill also included that the three crypto categories will be established as intangible personal assets thus elevating virtual currencies to the same status as fiat money. The law took effect from 1st March. This development is a boost to the market that was down by over 80% in 2018.
More crypto activities and businesses will spring up in Wyoming and perhaps more states in the U.S. would join. The state will join Singapore, Japan, Thailand, Germany and a few other countries that have given positive attention to blockchain and cryptocurrencies. The U.S. as a whole has had a very strict stance on crypto. Other top guns like China even banned some crypto activities. Cryptocurrencies are still recognized as unregulated assets in Mexico and Denmark. Cryptocurrencies need mass adoption to fully recover and fulfil their many potentials as not just a substitute for fiat currencies but their replacements.
Highlights of the Wyoming crypto bill
The following are the highlights of the crypto bills just enacted in Wyoming.
- To create a fintech sandbox that will give regulatory aid to blockchain and crypto innovators. This provision will be available for up to three years.
- To encourage Wyoming banks that would be true custodians for digital assets. Wyoming banks can start such operations from 1st September.
- Wyoming-based custodians will operate differently from traditional custodians. Investors will still directly own their digital assets under custody of a bailment just like with fiat money.
- Will sanction a new depository institution controlled by the state to provide banking services to blockchain and crypto-related businesses.
- Will grant intangible property rights to holders/owners of digital assets of all types (digital securities, digital currencies and digital consumer assets/utility tokens), to elevate them to the same status as fiat monies.
The efforts of the Wyoming state government to adopt cryptocurrencies will soon make the state a crypto hub in the United States. The state is looking to have a complete regulation and legal infrastructure to enable crypto-related businesses. It remains to be seen whether other states would join.
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