By codifying cryptocurrency into Wyoming’s banking regulations, Wyoming suddenly becomes that much more attractive to companies who use it. Not only because it allows them access to traditional banking services but also because it offers those companies a shield of legitimacy that comes with being subject to a carefully scrutinized regulatory framework.
“(Other) states have deregulated blockchain by doing nothing,” said Lindholm. “There’s no laws on it, there’s no nothing. Meanwhile the state of Wyoming has piles of laws on blockchain. If anything, we’ve regulated the s—- out of it. It all comes down to legal precedent and conforming laws these new technologies can fit into. That’s why these companies find us attractive.”
What do the regulations look like?
For all its quirks and regulations, the concept of banking isn’t too hard for the average person to understand: You convince a bunch of people to put money in, usually with incentives like an interest payout, or the convenience of a checking account. Sometimes people take money out — some more often or in larger amounts than others — and, every once in a while, the bank takes in a profit, usually from people who need to borrow money they don’t have to purchase things like cars, houses or even college degrees.
Cryptobanking is somewhat more complicated. While SPDI banks will dabble in similar functions to traditional banks — storing assets, conducting transactions and providing fiduciary management — the regulatory bodies that oversee the country’s financial systems are not yet set up to handle cryptocurrency on a federal scale. Essentially, it’s up to the states to define that regulatory certainty on their own, hoping the federal government goes along with it.