Nebraska passes law on bank digital currency custody services

Getting your Trinity Audio player ready...

Lawmakers in Nebraska have passed a law enabling state-chartered banks to offer digital currency custody services, in a move expected to help cement the state’s role as an emerging hub for the digital currency sector.

The digital currency-friendly legislation was drawn up with input from digital currency firm Telcoin, and was introduced by Republican Senator Mike Flood as one of his first initiatives since taking office.

The Nebraska Financial Innovation Act provides for regulation of digital asset depositaries to hold digital currency, with a whole new state banking charter covering digital asset services. The bill received almost unanimous support from lawmakers, passing its vote 46-2.

The law means Nebraska will provide “charter, operation, supervision, and regulation” for banks wishing to offer digital asset depositaries, which applies to institutions chartered in the U.S. or in foreign states.

Senator Flood has been a vocal supporter of the digital currency space, and the scope for employment and economic opportunities posed by the sector. Back in January, he described digital currency as a “great opportunity” for Nebraska.

“One of the things that we need to do is create high-paying, high-skilled jobs. We also need to create jobs that bring wealth into the community […] I have been working with someone I’ve known for a very long time and he’s in the cryptocurrency business. He has an interest in locating in Norfolk. There is great opportunity in this area.”

With digital currency custody services already open to banks chartered at a federal level, the legislation extends that provision to state chartered banks.

The new law means Nebraska follows Wyoming in becoming only the second state to enact such measures for digital currency services businesses.

See also: CoinGeek Live panel on Regulation of Digital Assets & Digital Asset Businesses