Virginia Governor Glenn Youngkin signed a bill that allows state-chartered banks to provide custody services for virtual currencies. The Block reports.
The House of Delegates and the Senate approved the measure without opposition.
The law will take effect on July 1, 2022, and will allow financial institutions to hold private keys to someone’s wallets, explained its sponsor, Republican Delegate Chris Head.
The rules will require banks to have “adequate protocols” and to “thoroughly assess the risks.” But how exactly the system will look remains to be worked out with the banking regulator and the state’s relevant commission, noted co-sponsor of the bill, Democratic Delegate Mark Kim.
“I think this is a great way for our state and the rest of the country to begin realisation of the idea of cryptocurrency. We want people to identify it as something that can be owned in a tangible sense. You will be able to go into a bank, deposit your virtual currency and ensure institutional-level security,” he said.
Kim said many people may be nervous about blockchain, but everyone is familiar with banks.
“Cryptocurrency is something everyone should pay attention to. It is a developing financial asset with growing popularity, which has significant potential for economic development in the covered areas,” noted Chris Head.
He said the idea for the bill was picked up from Texas. In June 2021, the state’s Department of Banking allowed local banks to store digital assets.
Earlier in May, a similar bill was passed in Nebraska. At the federal level, the Office of the Comptroller of the Currency, within the U.S. Treasury, has allowed financial institutions to store cryptographic keys since July 2020.