The line between banks and crypto is becoming a lot thinner thanks to republican politicians in Virginia. A new amendment will be signed into law by the state’s conservative governor Glenn Youngkin that will allow banks in Old Dominion to offer crypto assets and services to their customers.
Virginia Is Plowing Headfirst Into Crypto
Last week, the state senate of Virginia unanimously voted to move forward with a bill amendment that focused on digital currency custody. The amendment reads as follows:
A bank may provide its customers with virtual currency custody services so long as the bank has 26 adequate protocols in place to effectively manage risks and comply with applicable laws.
The amendment was introduced in the month of January by Virginia delegate Christopher T. Head. Since then, it has garnered the necessary signatures of all 39 members of the Virginia Senate. It is now set to be signed into law by Youngkin. The new bill states:
Acting in a fiduciary capacity, the bank shall require customers to transfer their virtual currencies to the control of the bank by creating new private keys to be held by the bank.
To carry out the new legislation, banks are required to offer risk management systems that will keep customers investing in crypto safe. Volatility is a major risk that comes with buying and trading digital assets, and banks must enforce necessary protocols that keep customers educated regarding the status of the industry.
In addition, banks will be required to provide insurance to their customers in the event of a hack or technical issue that results in a loss of assets. This is something that many customers of standard crypto exchanges aren’t likely to get…
Lastly, customers of the banks must establish new private keys that the banks, in turn, hold onto. This may be a bit of a problem for some crypto enthusiasts given that the entire heart of the crypto space centers on decentralization and individuals having full control of their finances. Thus, this may get in the way of some traders utilizing the crypto services of Virginia banks.
Crypto Awareness in the U.S. Is Growing
Still, many are looking at this as a huge step forward for the crypto industry. They comment that the barricades separating banks and crypto service platforms are being blurred and removed. This is certain to bring a stronger level of legitimacy and mainstream appeal to crypto, at least in the state of Virginia, and if the initiative is successful, perhaps other banks will follow suit.
Not long ago, Patrick McHenry – a republican congressman that serves on the House Financial Services Committee – suggested to the federal government that individual states be given full control over crypto regulations, and that they be permitted to implement laws they see fit without influence from the country’s executive branch.
