There sure has been a lot of FUD lately. You would think that the entire cryptocurrency sector is about to go under. Everywhere you look, someone is in attack mode.
Through all the gloom and doom, an amazing thing happened. It appears that cryptocurrency has a friend in a U.S. government.
No, not the U.S government, a government in the U.S.
Wyoming is long been rumored to be trying to make itself very friendly to blockchain and cryptocurrency. Over the past couple months, there were numerous pieces of legislation that was introduced in an effort to make it easier for companies involved in blockchain to operate in Wyoming.
One major piece of legislation passed and was signed into law on March 8th.
This law exempts cryptocurrencies from state securities laws since it defines them as "utility tokens". Developers and sellers of these tokens fall under this law as long as a token is used for the exchange of goods and services and not marketed as an investment.
We are seeing a precedent set with this law.
“The state of Wyoming is the first elected body in the world to define a utility token as a new type of asset class different from a security or commodity. This has been a hot topic in Washington D.C. recently, as the SEC considers cryptocurrencies to be securities, FinCEN says they’re generally money, and the CFTC views them as commodities. Now, however, you have a state coming out and defining utility tokens as a new form of property, and property is generally the purview of state law.”
This idea could spread rapidly. We know other states are considering measures trying to be "cryptocurrency" friendly. If they add a measure similar to this, it could really start to put some pressure on the Federal Government. As mentioned in the above quote, the Feds look at cryptocurrency differently, depending upon what department is doing the looking.
Some of Wyoming's other moves.....
House Bill 70 is one of five bills that have recently been turned into law in the state of Wyoming that aim to boost crypto and Blockchain businesses in the state. House Bill 19 amended the state’s money transmission laws that had previously prevented exchanges from effectively operating within the state; Coinbase and two other exchanges actually pulled out of the state in 2015. The remaining three pieces of legislation, all introduced by Long, aim to make Wyoming more competitive in attracting new crypto business.
House Bill 101 authorizes Wyoming corporations to create Blockchains to store records and the use of a network to identify shareholders and the acceptance of shareholder votes.
House Bill 126 allows the creation of “series LLCs” which are favorable to decentralized protocols as it enables LLCs to establish a compartmentalized series of members/managers, transferable interests or assets, and distributions to members. Senate Bill 111 exempts cryptocurrency from Wyoming state property taxes.
Does anyone find it surprising that there was little mention of this story by the mainstream media? While we know Wyoming isn't the most powerful state since it has a rather small population, the fact that a state in the U.S. is treating cryptocurrency in such a manner is a big deal. This one move cannot make the banksters happy because it does legitimize this as competion for them.
Regulation is something that is gaining a lot of attention of late. The past year saw the discussion ramp up as different entities decided to take action. Naturally, most of the decisions tended to go against this industry while favoring the establishment i.e. banksters.
Nevertheless, there is one thing to keep in mind. Regulation is done by governments, entities that do not always agree. Plus, we must factor in there are many different governments to take into account. Cryptocurrency is without borders, hence not tied to any one country. If one country is overzealous in the regulation, there are other places for the technology to move to.
Trying to clamp down in cryptocurrencies is akin to having water in one's palm and squeezing tightly in an effort to hold onto it. It has the opposite effect of what was desired. The only thing placing onerous regulation on cryptocurrency will do is drive it to another area.
Of course, this is true for all technology these days. And keep in mind, cryptocurrency is simply the first application of blockchain....there are many more coming.
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