CHEYENNE – The Wyoming Legislature’s efforts to become the nation’s leader in blockchain technology and digital assets are paying off, attracting industry moguls to put their roots down in Wyoming and bring their businesses to the Cowboy State.
For Laramie native Caitlin Long, Wyoming was an easy choice to bring her idea of a digital-asset bank to fruition, not only because of her upbringing, but also because Wyoming is the only state in the country with regulations in place for the type of Special Purpose Depository Institution she wanted to start.
This week, Long’s business, Avanti Bank & Charter, received approval from the Wyoming State Banking Board, marking the second digital-asset only bank to receive approval in the United States. These types of banks will largely focus on digital assets such as virtual currencies, digital securities and utility tokens.
“We will provide products and services that do not exist in the market today. Currently, the only type of U.S. financial institution that can provide final and simultaneous settlement of trades between digital assets and the U.S. dollar ... is a Wyoming special purpose depository institution like Avanti,” Long said in a news release.
Wyoming distinguished itself as the nation’s leader after forming a Blockchain Task Force in 2018. Since its inception two years ago, Wyoming lawmakers have passed 13 bills to attract the industry to the state, with guidance from Long. They also created a legal definition of a digital asset, which is necessary for banks like Long’s to do business.
With the path already paved, Avanti is expected to open in 2021, and Long previously told the Tribune Eagle that it could bring between 30 and 40 jobs to the state. While a number of tech positions will likely be remote, Long also said some employment opportunities related to things such as customer service and bank compliance could also come online.
One of the benefits of Wyoming leading the nation in digital asset legislation is the potential to attract financial service industry jobs, according to Chris Land, the attorney for the Wyoming Division of Banking.
Decades ago, the folks in Sioux Falls, South Dakota, were the first to identify the potential in the credit card industry, and their early pursuit led to the creation of thousands of jobs, as credit card companies flocked to the area. To this day, there are about 16,000 financial services jobs in the city.
“In my mind, this is hopefully the start of something similar in Wyoming with digital asset companies,” Land said.
The state’s efforts are arguably more important now, as it works to diversify its economy with the decline in the oil and gas industry. After a few years of writing legislation and setting the framework, the state approved its first special purpose depository institution in September – Kraken Financial.
With that announcement, Gov. Mark Gordon released a statement, saying, “Wyoming’s new charter will allow those using digital assets, like cryptocurrency, to access reliable financial services, protect consumers, and allow businesses a way to hold digital assets safely. I am proud that our state is leading the way and built the framework for this historic announcement.”
Even though legislation and definitions were essential to allowing these types of institutions, Land said the approval process for Special Purpose Depository Institutions is fairly similar to that of a traditional bank.
The new institutions must have a strong capitalization, a three-year plan, and a team of directors with financial, tech and banking experience. They’re also required to give the state $15 million up front in case the bank were to fail and the state would have to make its customers whole.
“We have strong capital requirements, and we also have the first examination manual for digital assets and banks in the U.S.,” which are standards for digital asset banks’ compliance, Land said.
Once Avanti and Kraken get operations running, Land said the state will continue to monitor their compliance, just as it does with traditional banks.
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