The Senate of Virginia unanimously voted in favor of legislation on Friday that will permit the state’s banks to provide crypto custody and management services, provided they have enough resources to manage the associated risk. Glenn Youngkin, the governor of Virginia, has to sign the bill before it becomes law.
In January, Representative Christopher T. Head introduced House Bill No. 263 to the US Senate. It was also highlighted that a bank may be able to provide its clients with custody services for crypto assets as long as the bank had 26 policies and practices that were adequate. By using these protocols, risks can be effectively managed and laws are complied with.
Governor of Virginia Glenn Youngkin has been instructed to sign the bill into law after it passed the Senate with a 39-0 vote. As mentioned in the bill, banks that wish to provide this service to their clients must follow three guidelines; they must implement effective risk management systems, carry adequate insurance coverage, and initiate an oversight program to address the risks associated with cryptocurrencies.
However, the Senate will require the banks’ customers to retain direct control of their public and private keys associated with their virtual currency, adding:
Acting in a fiduciary capacity, the bank shall require customers to transfer their virtual currencies to the control of the bank by creating new private keys to be held by the bank.
Several other states, including Wyoming, have also introduced legislation to create a fiat-pegged stablecoin. Last month, the House Committee on Financial Services discussed whether stablecoins regulations should be handled at the state or federal level.
As a result of the conversation, North Carolina Representative and ranking committee member Patrick McHenry proposed a state-level regulatory framework in lieu of a federal law that would regulate stable cryptocurrencies.
