The Senate of Virginia, United States approved unanimously a bill amendment request which allows traditional banks in Virginia to offer virtual currency custody services.
The bill was introduced by Christopher T. Head, delegate to the House (House Bill No. 263) was introduced in January 2022 by Christopher T. Head, a delegate. It seeks an amendment that would allow crypto custody services to be offered by eligible banks:
“A bank can provide virtual currency custody services to its customers as long as it has 26 appropriate protocols in place to manage risks effectively and comply with applicable laws.”
Senate passed the bill with a broad 39-0 vote. It is now waiting for Governor Glenn Youngkin to sign it into law. The bill requires banks that plan to offer this service must adhere to three requirements: have adequate insurance coverage, implement risk management systems, and establish an oversight program to address the risks associated with cryptocurrency.
The Senate will however require banks customers to keep direct control over their private and public keys that are associated with virtual currency.
“Acting as a fiduciary, the bank shall request customers to transfer virtual currencies to its control by creating new keys that can be used by the bank.”
Wyoming and other states have recently introduced legislation to create a stablecoin.
Related: A US lawmaker calls for state-level regulation of stablecoins during an hearing on digital assets
The House Committee on Financial Services held a discussion last month about whether regulation on digital assets and stablecoins should be at the state level or federal level.
Patrick McHenry, a North Carolina representative and ranking member of the committee, asked for state-level regulatory frameworks to be considered in place of a comprehensive federal law regarding stablecoins.
Jean Nellie Liang speaks at the Feb. 8 House Committee on Financial Services Hearing
Jean Nellie Liang, the undersecretary for domestic finances at the Department of Treasury, stated that U.S. dollar pegged stablecoin issues — both federally chartered and state-chartered banks — should be held to similar standards as insured deposit institutions.
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