The Senate of the U.S. state of Wyoming has passed a bill which defines cryptocurrency as property and establishes rules including for allowing banks to provide crypto custodial services. For secured transactions, however, the bill recognizes cryptocurrency as money subject to some of the same rules as money in the state.
Crypto Bill Passes Wyoming Senate
A bill defining digital assets as property passed the Wyoming Senate 28-1 with one excused Thursday. The bill classifies “digital assets, including cryptocurrency, as legal property,” the Wyoming Tribune Eagle reported. In addition, “It would subject cryptocurrency to some of the same rules as money by expanding existing laws,” the publication described.
Noting that “The legislation is one of eight bills designed to attract blockchain and other new technology companies to the state,” the news outlet detailed:
Senate File 125, sponsored by Sen. Tara Nethercott, R-Cheyenne, would establish property rights for owners of cryptocurrency and other ‘virtual assets’ under commercial law, clarifying the legal status of digital money. It also helps banks hold these assets in trusts.
“It adds value and legitimacy to the currency by giving financial institutions and businesses the ability to use it more flexibly in ways they are already familiar with,” Nethercott described.
The bill was introduced on Jan. 22. It passed the first reading on Jan. 29, the second reading on Jan. 30 and the third on Jan. 31. It was introduced to the state’s House of Representatives on Feb. 1.
Defining Digital Assets as Property
The bill classifies digital assets under Wyoming’s existing laws as “property within the Uniform Commercial Code (UCC).”
A digital asset is defined in the bill as “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.” Virtual currency is subsequently defined as a digital asset that is “Used as a medium of exchange, unit of account or store of value; and … Not recognized as legal tender by the United States government.”
Virtual Currency as Money for Secured Transactions
Digital assets are classified into three categories: digital consumer assets, digital securities, and virtual currency.
The bill refers to Wyoming statutes’ article 9 of the UCC (title 34.1) which lists rules on “secured transactions.” For the purpose of this article 9, “Digital consumer assets are intangible personal property and shall be considered general intangibles,” the bill reads. Similarly, for the purpose of article 8 and 9 of the same code, “Digital securities are intangible personal property and shall be considered securities.” Lastly, according to the bill:
Virtual currency is intangible personal property and shall be considered money … only for the purposes of article 9 of the Uniform Commercial Code, title 34.1, Wyoming statutes.
The bill also authorizes “security interests in digital assets,” establishes “an opt-in framework for banks to provide custodial services for digital asset property as directed custodians,” and specifies “standards and procedures for custodial services under this act.” Moreover, the bill states that “The courts of Wyoming shall have jurisdiction to hear claims in both law and equity relating to digital assets.”
According to the text of the bill:
A bank may provide custodial services for digital assets consistent with this section upon providing sixty (60) days written notice to the commissioner.
The Wyoming Tribune Eagle elaborated that the bill would “allow banks to hold digital assets in trusts with ease,” adding that “While customers could not deposit bitcoin in the bank itself, they could keep it in their personal trust as property.”
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Author: Kevin Helms