Nebraska Lawmaker Presents Bill to Open State Banks to Crypto Services
Crypto custody could come to Nebraska’s state banks following new legislation
The lines of separation between crypto and traditional finance spaces continue to disappear as mainstream adoption of cryptos ramps up. In a new regulatory development, a state lawmaker is pushing to allow traditional banks to keep custody of digital assets.
Launching Nebraska Into FinTech Stardom
This week, Mike Flood, a state senator from Nebraska, presented two bills before the statehouse to allow banks to custody digital assets. The bills titled the “Transactions in Digital Assets Act” and the “Adopt the Nebraska Financial Innovation Act” are set to go in for readings in the coming days.
The bills also describe a new type of financial institution that deals with digital assets across the state. The institutions that fall under this category will receive charter and supervision from the state government and financial watchdogs.
Flood, a Republican lawmaker, explained that the bills would also address issues of discrimination crypto-related firms and individuals face from U.S banks. Flood explained in the second bill,
“The rapid innovation of blockchain and digital ledger technology, including the growing use of virtual currency and other digital assets, has resulted in many blockchain innovators and consumers being unable to access secure and reliable banking services, hampering the development of blockchain services and products in the marketplace.”
Flood has been quite vocal in his support for cryptocurrencies in the past. Speaking with the Government Affairs Committee at the Norfolk Chamber of Commerce last week, he explained that the crypto market provides a great deal of opportunity for Nebraska to grow.
He hopes that the Cornhusker State can take another step towards becoming an emerging Fintech hub with these two bills. The crypto bills are expected to pass in the legislative house, with Republicans holding a 32 to 17 majority.
A Happy Union
Floods’ new bills also present the latest sign of a merge between the traditional finance and crypto spaces. Last week, Anchorage, a crypto custody and financial services provider, became the first native crypto firm to get a bank charter. The Office of the Comptroller of the Currency (OCC) also granted a conditional license for the San Francisco-based firm to operate as a national trust institution.
The license will allow traditional banks to offer crypto services to their customers, using Anchorage as a go-between. However, Anchorage won’t be able to hold any asset deposits. The license exempts the company from activities that define it as a “bank” under section 2(c) of the Bank Holding Company Act – one such activity is backing from the FDIC.
Earlier this year, the OCC also issued an interpretive letter allowing traditional banks to run independent stablecoin nodes. Per the letter, the new order will enable banks to use stablecoins for all permissible activities, including payment processing.