Virginia’s state senate unanimously passes a bill that would allow banks in the state to hold crypto and provide crypto services in the state. The bill passed unanimously in the state senate with a 39-0 vote. The bill is now under consideration by the state’s governor Glenn Youngkin, who has to sign it into law within seven days for it to become law.
Details of the Bill
The bill dubbed House Bill 263, would permit banks in the state to offer virtual currency custody services. To do this, banks would need to put into place adequate measures to effectively manage any risk.
During a Fox News Digital interview, the bill’s sponsor, Del. Chris Head, R-Roanoake, said he got the idea for the bill from Texas. As he was going through Texas’ regulation of the crypto sector, Head said that he discovered that no state had addressed the issue of crypto custodian services via legislation.
According to Head, permitting state-chartered banks to become crypto custodians will make Virginia the first state to offer this ability via legislation. He noted that the bill would give banks the right to hold a person’s private keys similar to how people use a safety deposit box at the bank. He believes that it would offer the state a huge advantage regionally and nationally. Head believes that everyone should pay attention to crypto.
Essentially, banks in the bill can now hold crypto much in the same way as major exchanges such as Coinbase hold crypto. Ideally, they could also be allowed to offer basic crypto trading services to their customers.
Expected Impact
By allowing banks to offer custodian services for crypto, it could help to boost confidence in the sector. As a result, more Virginians might feel confident about investing in the sector. It could also mean that more businesses in the state would be willing to directly handle crypto payments.
Crypto Regulation across States and the Federal Level
If Virginia’s governor acceded to the recent law, it would place the state in a special group of US states with crypto-friendly laws. Others are Florida, where laws are being considered to allow businesses to pay state taxes in crypto, and Hawaii, which is working on a broad range of crypto-friendly laws. At the Federal level, the OCC has already put in place measures that allow nationally-chartered banks to offer crypto custody services.
Despite the updated OCC rules, most banks have not rolled out crypto custody services. A major reason for this is that without federal legislation, most banks are not willing to take chances in the highly-regulated banking section. The reason for this is that while they may act in compliance with OCC rules, they might find themselves in violation of rules by another federal agency. Consequently, most nationally-chartered banks have adopted the wait-and-see approach. They may not have to wait much longer as the Biden administration is mulling creating uniform rules for the crypto sector at the federal level.
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