The state of Virginia has unanimously passed a new cryptocurrency bill that allows banks to provide custody for digital assets.
According to a report by Fox Business, HB 263 passed the state’s legislature earlier this week and is expected to be signed into law by governor Glenn Youngkin within the next seven days.
The new bill would permit banks to provide virtual currency custody services as long as they have protocols in place that could manage the risks, according to the legislation’s text.
Furthermore, banks that provide crypto asset custody services must possess trust powers and have a trust department approved by the state.
The bill’s sponsor, State Delegate Chris Head, explains to Fox Business the functionality of the legislation.
“By codifying the ability for state-chartered banks to become custodians of cryptocurrency, this will make Virginia the first in the country to provide this ability to banks through legislation.
Functionally, the bill allows state-chartered banks in Virginia to hold the keys to one’s cryptocurrency purse, similar to how individuals use safety deposit boxes at banks. Ultimately, this will put Virginia at a significant advantage regionally and nationwide.”
Head says that regulations passed in Texas last year inspired him to come up with the idea for the legislation.
“I came up with the idea for HB 263 last summer after reading about how Texas was addressing the issue of cryptocurrency and who is permitted to hold the keys to one’s cryptocurrency purse.
Texas decided to tackle this topic of cryptocurrency custodian services through its regulatory process. I discovered that no state at that time, nor to date, has addressed cryptocurrency custodian services legislatively.”
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/Leonid studio/Sensvector