Cryptocurrency and blockchain technology occupy a tenuous legal position in the United States. The rapid growth of the industry created a situation where government is scrambling to keep up. This often leaves new companies operating in a legal gray area, making it difficult to attract legitimate investors. The state of Wyoming hopes to change this, and reap the benefits of a business-friendly atmosphere. Their recent state legislation solidifies the legal status of digital currencies – giving full property rights to individuals. As such, citizens of Wyoming will no longer need to contract financial third-parties to ‘hold’ their cryptocurrency in trust.
This is not the first of Wyoming’s blockchain laws. In January, they outlined the legal status of specific types of cryptocurrency. In doing so, they’ve made digital currencies on par with other forms of money and liquid assets. Earlier last year, they also declared utility tokens to be a new asset class – thereby freeing them from baggage associated with other assets.
Blockchain’s Impact on Wyoming
As a landlocked and relatively remote state, Wyoming has struggled in the past to attract businesses. The blockchain revolution presented them with an opportunity. While much of the work is performed remotely, it would still be beneficial for cryptocurrency and blockchain companies to be headquartered in a state with friendly regulations. The relative distance from usual tech hubs is irrelevant – and the low cost of operation is particularly attractive to startups.
Introducing this new industry to Wyoming could add millions in revenue to the sparsely populated state. Despite its status as a relatively niche industry, blockchain is growing by leaps and bounds. The number of initial coin offerings in 2018 grew considerably, despite the downturn in the cryptocurrency market. If Wyoming positions itself well, it could establish itself as the national hub for blockchain technology. Some established cryptocurrencies have already made the move.
The State of Blockchain in America
When discussing cryptocurrency regulations in the United States, New York always comes to the forefront. The Empire State quickly established itself as a strict regulatory environment for the new industry – an act that forced some businesses to flee the state. While ostensibly acting for the benefit of individual investors, the introduction of the BitLicense strangled the nascent New York blockchain industry before it could gain steam.
Other states have been less hostile, with California understandably ranking high due to the sheer volume of technology businesses. However, cryptocurrency remains a touchy subject at the federal level. Both the SEC and the CFTC have waffled in their stance on digital currencies – at times positive, at times negative. Until blockchain and cryptocurrency laws pass through Congress, the entire industry will remain on an unsteady foundation.
Article By: Adam Stone