Louisiana’s governor signed the bill into law last week. Now banks in the state that is home to the city of New Orleans will be able to hold cryptocurrencies.
- Governor of Louisiana, in the US, signed the bill.
- Louisiana banks will now be able to hold Bitcoin and other cryptos.
- Another effort to integrate cryptocurrencies into the financial system in the US.
Following the approval of new regulations, financial institutions in the state of Louisiana in the United States will now be able to hold Bitcoin on behalf of their clients.
Louisiana Governor John Bel Edwards signed Bill No. 802, which for the first time allows banks and financial institutions registered in that state to operate as custodians of digital assets. I agree with you public recordsthe governor signed the regulations on June 15 and will become effective this August.
The enthusiast and CEO of the organization Satoshi ActionDennis Porter reported the news via Twitter on Wednesday. For his part, the director of Pelican Center for Technology and Innovation, Eric Peterson, who supported the project, tHe also reported on the enactment of the new law in a tweet. the news media Finbold reviewed.
— Dennis Porter (@Dennis_Porter_) June 21, 2022
Sponsored by Louisiana State Representative Mark Wright, the intent of the project was to drive the integration of cryptocurrencies such as Bitcoin to the operations of state financial entities.
As can be read in legislative document No. 509, “relating to digital assets”your goal is “provide definitions; allow financial institutions and trust companies to act as custodians of digital assets; provide parameters and procedures; and provide related matters“.
Banks will be able to hold Bitcoin
The legislation, which takes a step toward cryptocurrency adoption in the southeastern US, also has some highlights, including a requirement for banks that choose to be custodians of the asset class. According to the law, entities must have extensive insurance to cover and guarantee the restoration of losses due to hacks or cyber attacks.
“A financial institution or trust company may provide virtual currency custody services to its customers if the financial institution or trust company has appropriate protocols to effectively manage risks and comply with applicable legislation“, says the law, which adds later:
If a financial institution or trust company decides to offer such services, [esta] you will need to do all of the following:
(1) Implement effective risk management systems and controls to measure, supervise and control the relevant risks associated with the custody of digital assets such as virtual currency.
(2) Confirm that you have adequate insurance coverage for such services.
(3) Maintain a service provider oversight program to address provider relationship risks…
On the other hand, as the medium collects The Ascent, the legislation also hints that banks may choose between two types of custodian: non-fiduciary and fiduciary. In the first case, the entity would only keep the assets for safekeeping, while the client would keep the legal title and the private keys necessary to trade the cryptocurrencies.
In the second case, the bank would act as a trustee on behalf of the client, taking control of both the cryptocurrencies and the private keys so that the institution can actively trade and manage the portfolio on behalf of the client as it would with stocks, bonds, exchange-traded funds or investment funds.
US Crypto Adoption Efforts
The signing of the bill in Louisiana is the latest legislative effort by the United States to integrate cryptocurrencies with the traditional financial system. Just a few weeks ago, Senators Cynthia Lummis and Kirsten Gillibrand introduced a landmark bill in Congress to comprehensively regulate the digital asset ecosystem.
Although that proposal is still in the early stages of discussion, it joins the independent efforts of several states in the country that are promoting the adoption of crypto assets. Major cities like Miami, New York, and Texas have moved to integrate cryptocurrency payments and encourage adoption of their underlying technology, blockchain.
As for Louisiana, this is not the only effort of that state towards crypto. According to reviewed Finboldthe representative Wright, who is a well-known cryptocurrency enthusiast, has also proposed a regulation that would allow the creation of zones free of regulation of industrial power for the state.
The bill Nope. 1010 poses the designation of “an extension of land within the parish as a zone of power”; a movement that, according to some like Eric Peterson, could do of Louisiana an attractive place for miners from Bitcoin.
Article by Hannah Estefanía Pérez / DailyBitcoin
WARNING: This is an informative article. DiarioBitcoin is a means of communication, it does not promote, endorse or recommend any investment in particular. It is worth noting that investments in crypto assets are not regulated in some countries. May not be suitable for retail investors as the full amount invested could be lost. Check the laws of your country before investing.