Wyoming’s 13 New Blockchain Laws and it’s analysis
The state of Wyoming gathered its Blockchain Task Force last year, whose aim was to pass legislation to make the jurisdiction an attractive choice for industry startups.
Named the “Delaware of digital asset law,” a reference to Delaware’s lead in corporate law, Wyoming presently has 13 laws in the books and eight more recommended for 2020, putting the state ahead of more than a dozen others pondering on crypto and blockchain-related legislation.
Wyoming’s Blockchain Task Force
Wyoming is a U.S. state that provides a large, welcoming legal structure that enables blockchain technology, both for individuals and companies.
In considering what the ‘Blockchain Task Force‘ achieved during its tenure, Caitlin Long, 22-year Wall St. veteran, crypto, and blockchain advocate and expert, and former task force member like to use a software analogy:
“Wyoming released a comprehensive, open-source operating system, i.e., the legal framework, including 13 enabling laws + 8 more bills proposed for 2020, on top of which users can build applications.”
Caitlin Long, who discovered Bitcoin in 2012, has become an integral supporter of the crypto community in the U.S. Having experienced firsthand the going-on of Wall St., she was impressed by the security provided by a blockchain network.
She was impressed by the fact that digital currencies were a financial asset that could be tracked efficiently and could not be lost within financial institutions. On being introduced to the technology: “It lifted a cloud off my shoulder,” Long said. “It made me very optimistic.”
Notwithstanding the state’s initial success, Wyoming is far from finished. There are eight bills proposed for next year’s legislative session that already have committees that have consented to sponsor them, meaning they have a strong chance of becoming law.
Next, with the job of the Task Force complete, the state legislature is set to substitute it with something called a select committee.
Long explains that a select committee can be even more active in the blockchain industry’s future needs and challenges as it will be able to sponsor legislation directly. The Task Force could only propose legislation and had to struggle to find sponsors who were “a time-consuming extra step in the process that introduced risks.”
Analysis of Laws
Let’s have a glimpse at the highlights on Wyoming’s newest blockchain laws, as described by Caitlin Long in Forbes:
- Recognizes direct property rights for sole owners of digital assets of all types like virtual currencies, utility tokens, and digital securities. It applies the super-negotiability rules of commercial law to virtual currencies, which foster their liquidity by using the same rules that apply to money.
- Creates a fintech sandbox to grant regulatory relief to financial innovators from existing laws for up to three years.
- Introduces a new type of state-chartered depository institution to render vital banking services to blockchain and other businesses. The bank should have 100% reserves, cannot lend, is for business depositors only, and FDIC insurance is optional. Such banks could be operating from March 31, 2020.
- Authorizes the first genuine ‘qualified custodian’ for digital assets, which is a bank. Wyoming banks can start such operations by September 1, 2019.
According to Long, Wyoming’s digital asset custodians will stand out beyond others because they will respect the direct ownership nature of digital assets. These new custodians won’t be similar to traditional securities custodians, as, for a Wyoming-based custodian, investors will still directly own their digital assets under custody as a bailment. They can maintain direct ownership while merely giving up control.