Virginia Senate In his vote on Friday, he unanimously approved a new bill that would allow banks in the state to offer crypto custody services, provided they have sufficient resources to manage the risk involved. The bill will go into effect after it is signed by Virginia Governor Glenn Youngkin.
The bill is designed to effectively allow banks to hold wallet keys for customers, and is geared mostly towards institutional investors with large crypto holdings.
Bill Aims To Boost Crypto Investments In Virginia
The move has been interpreted as another step in the growing trend of US states rushing to regulate cryptoassets. While the space is federally recognized, many states do not yet have comprehensive regulations on crypto. Last month, Colorado Bitcoin (BTC) and other popular altcoins as tax payments, making it the first state to do so.
The boom in crypto trading by 2021 also showed that several states are trying to attract investors through appropriate regulation. Data from the National Conference of State Legislatures showed that 33 states passed crypto-related legislation in 2021.
The states of Wyoming and Arizona have also proposed bills that would allow citizens to pay taxes in crypto. Arizona also has a proposal aimed at making Bitcoin legal tender in the state. New York Mayor Eric Adams also agreed to receive his first three paychecks in crypto.
Crypto storage, works differently from a regular wallet and is more of a service for institutional investors. Currently, Coinbase is one of the biggest players in providing crypto custody services, but Virginia’s move may now increase competition in the industry.
Several other exchanges and banks had also started offering custody services since 2021. Storing wallet keys with a custodian adds an extra layer of security to one’s crypto assets and the key holder becomes the main access point to crypto markets for the client.