Trailblazer: Wyoming Leads the Charge to Create New US Banking Entity for Bitcoin and Crypto
Wyoming is on track to blaze another trail for a new frontier: Bitcoin and cryptocurrency.
The Equality State is now steps away from establishing the first two “speedy banks,” a new type of banking entity that specializes in crypto transactions.
Formally known as a Special Purpose Depository Institution (SPDI), a speedy bank will be able to provide basic financial services, such as Bitcoin payroll, access to private keys and other blockchain-based and crypto transactions.
According to a report by the Cowboy State Daily, Wyoming’s Banking Division is the chartering authority for the new banks, legalized by legislation earlier this year, and will take up to nine months to process an application.
The Division’s general counsel Chris Land says the first applicants submitted filings in October.
“We’ll review their applications closely and determine whether they have a proposal that meets our high standards and doesn’t present significant risks to the state or national financial system.”
Caitlin Long, who led the Wyoming Blockchain Task Force, says the primary purpose of SPDIs is to store private keys.
“The average person won’t even know it’s a bank. It’s really there to provide custody of access to the cryptographic keys.”
“We really needed new economic ideas in Wyoming, and both Gov. Matt Mead and Gov. Gordon got behind this. Legislative leadership recognized this is an opportunity for us to truly lead, and hat’s off to them. They did it.”
Land says that while companies using crypto have encountered several obstacles in their daily operations, the SPDI solution is up against several unknowns. Given the novelty of the technology, his job is to mitigate losses and drive a net gain while adopting new infrastructure.
He tells the Cowboy State Daily,
“There’s always a risk, because it’s innovation. I’m literally spending 90 percent of my time trying to mitigate those risks. In case one of the banks fail, we have policies and procedures and resources to ensure it doesn’t cost the state money.”
Land says the initiatives have wide bi-partisan support.
“This is an area where everyone – regardless of party, regardless of branch – wants to see a path forward to success.”
Long, who recently announced the completion of her role as a gubernatorial appointee on the Wyoming Blockchain Task Force, which recently concluded its work, expects a new committee that directly sponsors legislation to replace it, greatly accelerating the state’s mission of forming a regulatory framework for blockchain companies and cryptocurrencies. She says the Blockchain Task Force has already signed off on a list of achievements.
“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 are able to build applications (i.e., blockchain businesses). But Wyoming is far from finished, as future upgrades and new versions are still on the planned roadmap.”
As for Wyoming’s ultimate ability to lead the way among policymakers and regulators across the country, Long points to the state’s strong history of innovation and breaking tradition.
“We’ve done this at least twice before – we did it 150 years ago when we gave women the right to vote. And Wyoming invented the Limited Liability Company in 1977, which is the most prominent form of business entity in the United States today.”