Lawmakers from Wyoming have introduced legislation that will allow the issuance of tokenized stock certificates on the blockchain. The direct issuance of stocks on the blockchain is getting popularity throughout the world as it is being considered as the future of the stock exchange industry. House Bill 1085 would permit the use of tokenized digital share certificates in lieu of paper-based versions. If the bill is passed into the law would come effect on 1st July 2019. Two other very interesting bills have been passed recently in Wyoming.
The first one is titled the ‘Wyoming Utility Token Act Property Amendments’ or the ‘Bill 62’. It is significant in establishing a new asset class defining open blockchain tokens with specified consumptive characteristics as intangible personal property. This means that the said tokens will not require an exemption from federal security laws.
The bill goes on to say that the open blockchain tokens governed by this act do not constitute securities because a person who is sold a consumptive open blockchain token cannot receive a cash payment or share or profits from a developer or business but instead will receive a fixed amount of consumable services, content or property.
Bill 57 is entitled The ‘Financial Technology Sandbox’ which creates a fintech regulatory sandbox. We have seen a couple of such sandboxes arising around the world. For eg, recently Bahrain announced a fintech sandbox. This is essentially a supervised inflexible testing environment that provides waivers for certain statutory and rules that would otherwise hamper innovation.
The establishment of this act in Wyoming also reportedly aims to foster a welcoming business environment for the developers of new financial products and services nearby attract fintech talent to the state.
Now in the most recent bill, Wyoming also offers three different classifications of digital assets which are digital securities, digital assets, and virtual currencies. This gives things like Bitcoin, the same treatment as money within the state. These classifications are nothing new but the application of these classifications to cryptocurrencies specifically is quite good as it provides regulatory clarity.
The bill also means that Wyoming could authorize banks to opt into an enhanced supervision regime for digital asset custody. This would be designed to meet the SEC’s requirements for digital assets. Essentially, this would put a bank at the steering wheel which would mean that we could see the operation in all 50 states. It would mean that bitcoin would have legal status without the involvement of any intermediary.
All the above things are building on a whole raft of previous legislation that has come through in 2018 with Wyoming senator and house representative passing things like ‘Bill 70’ which relaxed securities regulations and money transmission laws for certain tokens offered via ICOs in the state. Also, a separate house bill regarding the exemption of virtual currencies from the ‘Wyoming Money Transmitter Act’ was passed late last March as well as a bill exempting virtual currencies from state property taxation in February last year and a slew of further pro crypto and blockchain bills which have already been passed in Wyoming.
Cardano or more specifically IOHK is moving out of Hong Kong and moving to the USA and interestingly they are moving to Wyoming making Cardano, an American company. With this move, we might see other big companies such as Coinbase, Kraken or others also moving to Wyoming which could turn the state into the next silicon valley.
After Binance's announcement on June 14, 2019, that its U.S. customers will no longer be able to trade on Binance.com…