Nebraska signs new law to create crypto banking charter

Nebraska has signed a bill that will allow state financial institutions to function as custodians of digital assets. With the new state banking charter, institutions can offer cryptocurrency-related services to customers.

Nebraska follows Wyoming’s lead

According to a Press release By Telcoin, a blockchain fintech company, Nebraska Governor Pete Ricetts enacted Bill 649 on Wednesday (May 26, 2021). The bill, also known as the Nebraska Financial Innovation Act, creates a state banking charter that would allow financial institutions to operate as custodians of digital assets.

Telcoin drafted the bill with the support of Republican Senator Mike Flood, with the aim of delivering digital asset-based financial services to U.S. customers in a regulatory environment. Senator Flood, who introduced the bill to the House in January 2021, believe that the cryptocurrency industry has the potential to grow the state.

The now enacted Nebrsaka Financial Innovation Law could attract crypto and blockchain companies to the state, making Nebraska a major financial center for innovative technologies. According to Senator Flood:

This new charter sends the right message that Nebraska is open for business in this exciting new space. I am delighted to welcome Telcoin to Norfolk, Nebraska.

Also commenting on the latest development, Paul Neuter, CEO of Telcoin, said:

“Basically, this new charter represents a type of alternative bank that does not have the right to lend your money to someone else. Institutions under this new charter will use blockchain technology to allow users to self-guard their digital assets and put their money at the service of their own benefit.

More and more US states are looking to create a crypto banking charter

Nebraska becomes the second state after Wyoming to have a state bank charter. In September 2020, the main cryptocurrency exchange Kraken, obtained a banking charter from the Wyoming State Banking Board, to create Kraken Bank, a special purpose deposit institution (SPDI).

As reported through BTCManager later in October, Avanti Bank and Trust became the second institution to receive a banking charter from the same state banking regulator. In addition to the products and services offered by Avanti, the company said it is looking to issue its US dollar-backed stablecoin.

Illinois is also on track to become the third state with a digital asset banking charter. The Illinois House Committee on Financial Institutions in March, unanimously adopted a bill creating a banking charter for “special purpose trust” establishments. Meanwhile, the bill could be enacted in May 2021.

At the federal level, the crypto startup Anchorage, became the first to receive a banking charter of the Office of the Comptroller of the Currency (OCC) to become a digital asset bank in the United States

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