Once I told a friend that Wyoming was a place in the United States where innovative laws and legal practices were implemented and eventually accepted by the entire country. He thought I was joking. He only believed me after I explained the surprising history of the Limited Liability Company, how a form of business which started in Wyoming became one of the most used and most important business structures in use today. And to be honest, when one of my professors first mentioned the LLC being created in Wyoming, I thought he misspoke. It now seems that Wyoming is making another push for innovation. Wyoming has enacted 13 block-chain enabling laws. They are the first state to “provide a comprehensive welcoming legal framework that enables blockchain technology to flourish, both for individuals and companies.”
Wyoming was the first state to recognize digital assets as property under the Uniform Commercial Code (UCC). In the bill “digital asset” is defined broadly, mean[ing] a representation of economic proprietary or access rights that is stored in a computer readable format, and includes digital consumer assets, digital securities and virtual currency.” Wyoming also passed the “Financial Technology Sandbox Act.” This act created a testing ground for “financial products and services in Wyoming; authorizing limited waivers of specified statutes and rules under certain conditions.” That act provides up to two years of exemption from various statutes and other various rules to encourage emerging technology to create a presence in Wyoming. And perhaps most importantly, the Wyoming legislature authorized banks to provide custodial services for the “digital assets” that it recognizes in the same bill.
It now seems that Wyoming is making another push for innovation. Wyoming has enacted 13 block-chain enabling laws.
The aforementioned laws that were passed provide blockchain companies significant incentive to take their business to Wyoming. “Blockchain businesses in general have difficulty opening and maintaining traditional banking relationships due to FDIC and OCC inclusion of blockchain ventures in the same buckets as firearms and cannabis.” Now that Wyoming offers the traditional money management services of banks, the innovative blockchain venture will spend less time concerning itself with cash flow issues, and more time working to improve their new technology or services. And clearly that is something that the state is concerned with. The Financial Technology Sandbox Act was created in part to help “innovators to develop the next generation of financial technology product and services to Wyoming.” It seems the legislatures also do not want the innovators to be bogged down with finely tuned financial regulation that was enacted at a time when digital technology was not at the forefront of currency and finance. The young virtual currency programmer likely does not know the intricacies of the laws and regulations which govern his digital asset. And Wyoming does not expect the programmer to. By offering a two-year exemption Wyoming offers room for innovation and experimentation that is unlike any other state in the nation.
These are just some of the incredibly block-chain friendly bills that Wyoming has recently passed. The result of these newly passed laws makes one thing abundantly clear, Wyoming is open for your blockchain business.
Jared McDaniel, 4 March 2019