Following up the monumental passage of Bill SF0125, Wyoming’s progressive cryptocurrency bill classifying digital assets and currencies under existing property laws (and offers banks custodial infrastructure for cryptos), the Equal Rights state has also passed two other major blockchain related bills – House Bill 0074 (HB0074) and HB0185. If you’d first like to brush up on the fundamentals of SF0125, you can find its defining framework and text here.
Let’s take a look at the two other cryptocurrency regulatory bills which were passed last Friday, February 15th – both of which are crucial for establishing a functioning and governing framework for all actors in the blockchain ecosystem.
HB0074 & Depository Institutions
HB0074 was introduced and drafted to tackle a core challenge plaguing the blockchain industry at the moment – banking the unbanked crypto and blockchain startup companies. Specifically, the Wyoming legislature found that the rapid innovation and rise of blockchain technology resulted in an unfortunate happening for blockchain innovators and startups – a lack of secure and reliable banking services for them. Such so obviously hindered potential development and growth of blockchain products and services in the marketplace.
HB0074 notes, “Most financial institutions today do not have the requisite expertise or familiarity with the challenges facing blockchain innovators which is required to provide secure and reliable banking services to these innovators.”
As an answer, Wyoming has provided for the implementation of special purpose depository institutions to cater to these startups. The text of the bill lays the requisite framework for such depository institutions; specifying the applicable federal laws that govern them, establishing liquidation procedures, outlining dissolution procedures, and more.
Additionally, HB0074 prescribes for depositor requirements and the scope of their business, of course requiring the company to “Be engaged in a lawful, bona fide business,” and “Be in good standing with the jurisdiction in the United States in which it is incorporated or organized.”
Finally, HB0074 authorized two full-time employees to lead the auditing efforts, appropriating USD $175,604.00 to ensuring compliance and proper auditing.
Now, let’s turn to HB0185 and what it means for corporations and the issuance of certificate tokens in lieu of stock certificates.
HB0185 & Corporate Stock-Certificate Tokens
HB0185 is an act and bill relating to corporate shares and distributions, sanctioning corporations to issue certificate tokens instead of stock certificates. Simply put, it allows corporations to issue securities in a tokenized format.
As Caitlin Long, a co-founder of the Wyoming Blockchain Coalition, noted in an interview with CoinDesk, “Normally, a stock certificate is a piece of paper…If you want to use a blockchain token to represent a stock certificate [that would be] legal in Wyoming. [It would be] a legally issued security.”
The text of the bill reads, “Share certificate, share, stock, share of stock or words of similar import shall be construed to include a certificate token.” Furthermore, it defines exactly what “Certificate token” means in the context of corporate issued securities, explaining, “‘Certificate token’ means a representation of shares that is stored in an electronic format…”
The passage of all three bills (including SF0125) in 2019 is a gigantic step for cryptocurrency and institutional adoption, and quickly putting America’s least populated state on the blockchain map.
You can find the text of all three bills here:
- SF0125: https://www.wyoleg.gov/Legislation/2019/SF0125
- HB0074: https://wyoleg.gov/Legislation/2019/HB0074
- HB0185: https://wyoleg.gov/Legislation/2019/HB0185