Over the past several weeks, the U.S. State of Wyoming “Utility Token” bill, formally called the Wyoming House Bill 70 (HB70), and other crypto-focused measures have been in the news. Wyoming state legislature passed the HB70 in early March 2018.
The Difference of Opinion Attracts Crypto Business to the Cowboy State
According to the bill, cryptocurrencies are considered as a means of exchange, calling them “utility tokens” and not a form of investment. The bill was signed into law by Republican Governor Matt Mead in March 2018. However, the federal government and U.S. Securities and Exchange Commission (SEC) have not digested Wyoming state’s welcoming nature towards the crypto sector.
Further explaining what cryptocurrencies can serve, it is said to be a form of virtual currency that is exchanged for goods and services. The bold step has led subsequently led many cryptocurrency and blockchain-related startups to establish their crypto ventures in the state.
In contrast, different financial authorities in the country consider cryptocurrencies in different ways, with the SEC regarding virtual money as securities, Commodity Futures Trading Commission (CFTC) referring to it as commodities, and the Financial Crimes Enforcement Network (FinCEN) saying they are just currencies.
Wyoming State Standpoint Clashes With Federal
Since the bill was signed in March 2018, no less than two to three crypto-related businesses have registered in the crypto friendly state on a daily basis. Tyler Lindholm, the state representative, told Bloomberg that companies who were initially looking to go abroad for their initial coin offerings (ICOs), capital raising technique, are instead choosing Wyoming.
Another related bill passed by the legislature includes the House Bill 19 (HB19), which removes cryptocurrencies from the Wyoming Money Transmitter Act. Though the SEC has not commented about this action, Jeff Bandman who was once a senior financial technology expert at the CFTC believes the state will have no issue whatsoever with the SEC as regarding this new law. Lindholm iterated the following:
“My legislation does tend to not align with federal bureaucracies very well, and it wouldn’t be the first time I got a letter from an agency at the federal level. If it comes down to a federal fight, I think it’s great for Wyoming to have partners.”
On May 15, 2018, Tyler Lindholm hosted an event where the SEC was also invited to discuss the parties concerns about the relevant regulations. At this event, Lindholm demonstrated how the blockchain itself could help track the biographical information of cattle.
The state of North Dakota and New Hampshire have shown interest to form similar laws in hopes of capitalizing on the crypto boom.
Will other U.S. states pass crypto friendly regulations? Share your views in the comments section.