Nebraska proposal seeks to allow banks to offer digital currency services

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New legislation proposed in Nebraska would allow banks to facilitate digital currency transactions, in a move that would bring the state in line with others, such as Wyoming.

The initiative was passed through the first of three stages by lawmakers, winning the support of 39 elected representatives. The bill will now move on to the second stage of the legislative process, for enrollment and initial review.

Legislature Bill 649 will implement the Nebraska Financial Innovation Act, allowing the creation of new digital asset depository institutions, alongside a new regime for the supervision of these institutions.

The proposals would see Nebraska become the second state in the U.S. to implement a formal charter system for digital currency banks, after Wyoming became the first back in September 2020.

The bill was introduced by Republican Senator Mike Flood, following a conversation with a digital currency entrepreneur who moved into Wyoming specifically on the back of their measures.

Noting the chance for Nebraska to take similar steps to gain advantage as a destination for cryptocurrency, Flood described it as “a once-in-a-lifetime opportunity not only for my district but the state of Nebraska.”

However, the bill’s passage is far from a foregone conclusion, with some lawmakers such as Senator Steve Erdman expressing skepticism about the bill in principle and in practice.

“This bill is not anywhere close to being in a form where it could pass.”

Nevertheless, the proposals are a step in the right direction for Nebraska, with lawmakers now set to consider the bill further as it makes its way through the legislative process.

Sen. Flood presented the bill as part of a duo of two instruments, including one which sets out requirements for banks to provide digital currency custody services, as well as other support services for handling digital assets.

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