United States Will Soon Have the First Digital Asset Bank, FreeRange, Thanks to a Wyoming Holding Company

Wyoming has been aggressively persistent in their stride towards integrating blockchain technology and new regulations that make innovation possible. The state has created a climate that is enticing to blockchain companies, with big names like Cardano, Kraken, and ConsenSys already getting involved. Now, a company called FreeRange from New Mexico is coming in, but they have a goal in mind – becoming the first digital asset bank in the country.

The Special Purpose Depository Institution bill (HB0074) was signed by Governor Mark Gordon this week, implementing a law that made it possible for Wyoming to host “crypto banks,” which no other state has done yet. Caitlyn Long, a blockchain proponent and an advisor with the Wyoming Blockchain Coalition, explained that the law will hopefully put aside the “horror stories” of crypto startups seeing their liquidity blown away.

Blockchain companies have seen a lot of roadblocks in the banking industry, considering that they are federally regulated and that their policies on cryptocurrencies have been a little unclear. COO Amber Terrasas of FreeRange explained that blockchain companies need to be allowed to hold and use bank accounts to show their validity as a US-based company.

Even though Wyoming brought forth positive legislation for blockchain technology this year, the companies that use it have still been unable to bank anywhere. This blockage causes a separate issue in the companies’ ability to pay withholding taxes and related fees. With so many software and IT developers using blockchain, Terrasas believes that something needs to be done to create the right atmosphere in the banking industry, both statewide and nationwide.

Wyoming is presently the only place for companies in blockchain to bank and store their assets due to the addition of special purpose banks. This type of bank does not make much of a difference to consumers, but they are designed to meet the needs of blockchain-based companies, because they have to keep 102% reserve which is not lent out, as FreeRange CEO Joe Pitluck says.

If FreeRange manages to secure its charter to open the planned bank, it will need to have the 102% reserve, full surety bond, and all insurance, Pitluck explained. With lower capital requirements, more deposits can be accepted with FreeRange and other SPDIs. They will also provide custodial services for institutional investors and their digital assets, considering that the assets have to be held with a third party.

One of the positive regulations that SPDIs will not be subject to is the oversight of the Federal Deposit Insurance Corporation (FDIC), because it will not qualify for the insurance. Without this oversight, the institutions can still operate nationally, but they aren’t treated in the same way that ordinary banks and other high-risk enterprises are.

In Wyoming, the crypto banking law is effective on July 1st, and Pitluck confirmed FreeRange’s intentions of applying first for the charter by the October deadline, which is when the state banking commission must adopt rules for the law. If everything goes as expected, the second quarter of 2020 will see the first crypto bank in the country with FreeRange.

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Avatar
Krystle M
Krystle is an American cryptocurrency blogger that wants to see the future of crypto and blockchain technology evolve. She has been writing about cryptocurrency for about a year, with a special interest in blockchain technology and regulatory measures around the world. While away from writing and learning about the changes in the cryptocurrency industry, she likes to indulge in science fiction novels and further her experience in playing both guitar and piano.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

LEAVE A REPLY

Please enter your comment!
Please enter your name here

3,511FansLike
2,795FollowersFollow
4,273FollowersFollow

Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

DeFi Growth & Stablecoin Surge Most Bullish Crypto Development: DCG State of Crypto 2020 Survey

39% of the respondents that involve 150 portfolio companies see DeFi as the most bullish crypto development of 2020, as per the DCG Founders...

Non-Custodial Bitcoin Exchange, Hodl Hodl, Launches Lending Service Without KYC

Hodl Hodl, a non-custodial Bitcoin exchange, is launching a KYC-free lending product for its customers. The exchange claims that its lending product would be...

Total Value Locked in Harvest Finance Surpasses $1 Billion, Up 366,200% Since September

Decentralized platform Harvest Finance that provides users a way to farm assets for the highest yields now has more than a billion dollars in...

Strong Institutional Demand for Bitcoin, CME Becomes Second Largest BTC Futures Market

Bitcoin's price made a big shift this week as the bulls gained control of the market and pushed it past $13,000. A similar shift has...

PoolTogether's ‘No Loss' Gambling Platform Utilizes Chainlink’s VRF on Ethereum to Select Winners

Chainlink announces its verifiable random function on the Ethereum mainnet, bringing a host of benefits to the decentralized platform. PoolTogether, a gamified savings platform...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today