Cryptocurrency, Cryptocurrency Exchange, News, Regulation

Virginia Passes Legislation That Allows State Banks To Become Crypto Custodians

Recent Virginia legislation permits state-chartered savings banks to hold cryptocurrency in their custody. Governor of Virginia Glenn Youngkin signed a bill on Monday authorizing state-chartered banks to offer custodial services for “digital currencies.”

Bill To Begin Effective On 1st Of July

Chris Head, a delegate of the Republican party, who sponsored the bill, which will take effect on the 1st of July, would enable banks located in Virginia to keep the security keys to a person’s cryptocurrency wallet. According to the bill, banks would be expected to have “sufficient protocols” and to “seriously analyze the risks” before conducting any transactions.

According to Mark Keam, a Democratic Delegate, who is also a co-sponsor of the bill, the specifics of how this system would operate will be worked out in the following months between bankers and the Bureau of Financial Institutions, a regulator at the SCC (State Corporation Commission).

In an interview with The Block, Keam said, “I believe this is an excellent approach for the people of Virginia and the nation at large to begin accepting the notion of cryptocurrencies. We want individuals to associate it with something that has a physical component to it. Also, anyone can enter a bank and put virtual money which the bank will safeguard for them.”

The Democrat said that although many people may be “nervous” about blockchain technology, everyone is acquainted with banks, despite several persons being “nervous.” Senator Head, who proposed the legislation, stated that it would provide Virginia with a “substantial edge.”

Talking to The Block, Head noted that the concept of digital currency is something that everyone should be familiar with. This nascent digital asset is gaining popularity, and it has enormous prospects for economic growth in the places that accept it.”

Virginia Emulate Crypto Policies In Texas

Head explained that he was inspired to introduce the measure after seeing that Texas was similarly tackling the problem at the legislative level. The Texas Department of Banking granted permission to state-chartered savings banks to hold cryptocurrency assets in June 2021. The Comptroller of the Currency of the United States, which regulates federally chartered banks, announced a similar initiative in 2020.

Since the federal government of the US delayed in its crypto regulatory framework, several states have taken it upon themselves to either embrace or fight crypto. In a bid to attract big names in the crypto industry, most states have enacted laws that will favor crypto usage. The Virginia legislation was approved unanimously by both the House of Senate and the Delegates, with no opposition.

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