The bill to regulate bitcoin and other digital assets in Nebraska, United States, advanced in the Senate when an initial amendment was approved with a strong majority. With these changes, it is expected to turn the region into an attractive area for private investment linked to the cryptocurrency ecosystem.
The project called “Nebraska Financial Innovation Act” It will allow banks, businesses and insurers to offer services to clients who own bitcoin (BTC) and other digital currencies.
The senators want the state to regulate and supervise the operations of entities that manage digital assets to, they say, “enable young business development,” while fighting money laundering. The regulation is intended to help foster an attractive, innovative, and healthy financial environment in Nebraska.
“To issue digital asset depositories a letter, authority, or license to do business under Nebraska’s Financial Innovation Act, the sum is $ 50,000,” states the amendment, which was voted on by a majority.
The initiative was initially proposed by Senator Mike Flood, on January 20, 2021. The bill was debated and escalated into an amendment, which means that it has evolved favorably, although it has not yet been definitively approved.
The initial draft amendment (AM1018) was put to a vote on Monday, May 10, approved by an overwhelming majority of 39 votes in favor and only one vote against. It now appears on the official website of the Nebraska Legislature as “adopted” in the “Considered” section of projects.
Steve Erdman was the only senator who voted against, three abstained and another 6 did not appear to cast their vote. On the other hand, in addition to Flood, also Senator Carol Blood, another blockchain promoter in Nebraska, voted in favor of the initiative.
Senator Blood has also driven uptake of blockchain technology in her region’s industry since 2018. In April 2021, she posted that she was working on a new project to boost the use of blockchains in Nebraska’s agronomic and livestock industry.
Senate vote on initial amendment to “Measure 649 – Nebraska Financial Innovation Act and provisions for controllable electronic records under the Uniform Commercial Code” of Nebraska, United States. Sources: nebraskalegislature.
Legislature Supports Use of Blockchain for Economic Development
In the amendment, the Senate declared that, to stimulate initiatives of high-tech economic development and operations of digital assets in the state of Nebraska, must have legislative support.
In order to prevent brain drain and young talent, improve the quality of life, support entrepreneurs to find private investors and create jobs, innovation must be allowed, the amendment says.
Senators stated that blockchain innovators are willing to address banking compliance such as federal customer identification, combating money laundering and profit requirements to meet regulatory concerns.
Another point they address is compliance with laws, such as know the customer (KYC policies) and anti-money laundering rules and the federal Bank Secrecy Act, “in order to ensure the future growth and reputation of the blockchain and technology industries as a whole,” the lawmakers say.
Finally, they hope that authorizing digital asset deposits in Nebraska will provide what is necessary for blockchain innovators and clients to thrive in the state thanks to the technology and financial industry.
They look for what, With these changes to the legislature, the financial sector can develop safely, at the same time that it will bring more formal employment opportunities for its citizens.
New definition for banks with the Financial Innovation Law
The Nebraska Legislature works to provide greater certainty to banks and institutions that hold or operate digital assets and reside in the state.
Therefore, it is contemplated to add to the definition of «banking institutions» to «any digital asset depository institution under the Nebraska Financial Innovation Act, together with the securities savings bank, mutual savings bank and other entities ”, indicates the initiative of law 649.
The Nebraska Financial Innovation Act encourages a broadening of the definition of a bank in Nebraska, also considering depositories of digital assets within this category. Source: Pixabay
Clarifying notes were also added to prevent some paragraphs from being used to avoid discriminating against companies related to the cryptocurrency ecosystem, in this way it is hoped not to impede their development and regulation.
With the changes made, the requirement for a license under the Nebraska Money Transmitters Act will not apply to digital asset deposit institutions, in the same way that it does not apply to banks.
A favorable point that gives certainty to novice clients is that entities or persons that offer exchange or protection of cryptocurrencies are obliged by law to make financial, legal and general warnings, including making the client aware of the volatility that some may have. of these digital assets.
As a negative point, the regulation of cryptocurrencies in Nebraska would affect the privacy that users currently enjoy, since the Nebraska Financial Innovation Act requires entities to verify their customers. With this action they seek to expedite the fight against money laundering.
This is done in accordance with US laws for the establishment of banks and other types of hedge businesses. The decentralized exchanges are also contemplated for a possible audit, as contemplated on page 6 of the initial current version of the document.
Charges for the supervision and administration of the Financial Innovation Law have also been added. To open a new branch, for a merger or a request to extend a conditional status for a depositary of digital assets, you must pay $ 500.
However, under Nebraska’s Financial Innovation Act, so-called “Crypto banks” they will not be able to sell digital assets in US currency, only will be able to exchange, transfer and store digital assets.
As it is an amendment, it still needs to have a final review and go through due process. If this is the case, it may also be referred to the corresponding authorities who will decide whether to proceed.
Digital asset transactions law was remitted
Senator Michael Flood had presented two legislative bills 648 and 649, as reported by CriptoNoticias in January 2021. The first is an initiative for banks and finance companies to adopt digital asset transactions in fiat currency.
However, the bill to adopt the Transactions with Digital Assets Act (648) has not made much progress as it does not appear as “Considered” on the website of the Nebraska Legislature. At the time of this writing, it is indicated that the last hearing was on February 23, 2021.
Although progress has not yet been made on allowing authorized banks to sell cryptocurrencies in fiat currency, the amendment that was approved expands blockchain definitions regarding digital transfers.
Wyoming, pioneer in crypto banks in the United States
In 2018, Wyoming was the pioneer state in regulating cryptocurrencies in favor of citizens. Bills were sent to exempt both users of digital assets and service tokens from taxes.
In September of the same year, Senator Carol Blood was already pushing for the definition of smart contracts in the Nebraska legislature and promoting that the technology around blockchain could be imparted to seize the opportunity and create a “technology boom” in her state.
A year later, in February 2019, Wyoming recognized bitcoin and cryptocurrencies as legal currencies, becoming the first entity in the United States to grant banks the ability to manage their clients’ digital assets.